The game Google is playing in court against Microsoft is absolutely brilliant.Today a judge will hear a case between Motorola Mobility and Microsoft, reports Reuters. Microsoft says that Motorola Mobility wants to charge it $4 billion A YEAR in royalties for patents Motorola holds on WiFi and video technology.
Microsoft says those fees are unfair.
Here’s what’s at stake:
- Billions of dollars in money paid from Microsoft to Motorola and eventually, Google.
- The ability for other companies, like Qualcomm to control fees for patents they licenses.
- The ability for Microsoft to import Xbox into the U.S. from factories in Asia.
- Perhaps, ultimately, the ability for Android device makers to use Android without having to pay Microsoft royalties or be sued by the software giant.
If the two don’t come up with an agreement, the judge could stop Microsoft from importing Xboxes into the U.S. for sale until they do.
Microsoft is saying that this amount is insanely high and unfair. A judge will rule today on if it agrees with Microsoft or not. If it does, this could affect how much power other companies get to charge for their patents used in standards.
Microsoft has a point. That is too much money for tech used as part of a standard like WiFi. Typically tech used in a standard is licensed for a tiny fee, maybe pennies per unit. It’s a practice called FRAND (fair, reasonable, and non-discriminatory terms).
But Microsoft picked this fight with Google. Microsoft has been attacking Android by going after the companies that build devices on it. It has bullied more than a half dozen Android/Linux device makers into paying it royalties on every device they made. Microsoft has reportedly been asking for $5 – $15 per unit (not pennies). Barnes & Noble refused to pay and the two were in court until they settled last week. That settlement keeps Microsoft’s Android patent shake-down scheme in tact.
So Google is buying Motorola Mobility for $12.5 billion and giving Microsoft a taste of its own medicine.
Geekwire’s Todd Bishop is live tweeting from the Seattle courtroom where the case is being heard today.
He tweets: Bottom line of Motorola’s argument: Microsoft should have responded to 2.25% patent royalty demand by negotiating, not filing a U.S. lawsuit. The Motorola lawyer told the judge, “Don’t forget they started this, we didn’t start this.”