Battle brewing over US patents

 battle-war-soldiers-1812-russian-frenchA battle royale – that’s your actual French that is – is brewing which could shake up the US tech industry.

Lawyers for Microsoft and Google are facing off at the 9th Circuit Court of Appeals in San Francisco in a long-running dispute over patents that were originally owned by cell phone maker Motorola Mobility.

The case involved the implementation of wireless and video standards in products including Microsoft’s Xbox consoles. But mostly it is about negotiations over “standard-essential patents” or “SEPs” — technologies required to implement industry standards.

Apple and T-Mobile are among the companies siding with Microsoft in the case, while Nokia and Qualcomm want to overturn a lower court’s ruling that found in Microsoft’s favour.

In 2013 Microsoft won a $14.5 million jury verdict against Motorola based on a finding that Motorola breached its obligation to offer its standard-essential patents for video and wireless technologies on fair, reasonable and non-discriminatory terms, known in legal circles as “RAND” or “FRAND.”

US District Judge James Robart in Seattle took the unusual step of setting a process for establishing royalties for standard essential patents.

Under his process, Robart Microsoft owed less than $1.8 million a year for its use of Motorola’s patented video and wireless technologies in Windows, Xbox and other products. Motorola had originally sought a rate amounting to more than $4 billion a year, plus $20 billion in back payments.

Apple said that the judge made the correct decision as it prevented preventing owners of standard essential patents from “holding up” other companies that want to implement standards.

However, Qualcomm argued in its brief that Robart overreached and came up with a process that did not adequately compensate Motorola for its patents. The chip maker said “the manifest errors” in the decision “will cause incalculable damage to innovation incentives and standards going forward” if it becomes a precedent.

Google, which acquired Motorola before selling the cell phone company to Lenovo, remains the owner of the patents in dispute in the case.