Microsoft Comes Away Clean in Motorola Patent Trial

The trial is not over by any means. The Motorola vs. Microsoft patent lawsuit is going to go on for some time but the first phase is well and truly over. The current case focuses on Motorola’s allegations that Microsoft is violating its copyrights in some of its products. In light of the allegations, Motorola had asked the court to grant them an injunction to prevent the release of new Microsoft products. However, the court denied the injunction stating that Motorola failed to show reasonable cause for granting it.

The case has been going on for several months now. The main dispute is not whether Microsoft is breaching Motorola’s patents. The cause for concern is that Motorola feels Microsoft isn’t offering enough money as royalties for using their designs. Microsoft has offered to pay $1 million per annum in return for using Motorola’s patents. Motorola on the other hand is seeking up to $4 billion a year which it deems fair compensation.

The last week of November saw the latest round of hearings between the two companies. The argument during this round was the concept of adequate compensation a patent holder can ask for. Both sides vociferously put forward their points. The main issue is that there isn’t any industry standard in the technology industry regarding how much should be paid as royalty for patent usage. However, no side could put forward a winning argument.

The judge decreed that both companies have the license to use the patents so there is no reason to order an injunction. Despite the fact that the compensation has not been agreed upon, Microsoft has the right to use the patents if it wants. Motorola only wanted to court to grant an injunction and stop Microsoft’s products from releasing to strong-arm the company into agreeing to its demand of $4 billion.

The case has been going for the best of a year now. Since the beginning, the bone of contention has been the money offered by Microsoft. Recently, Motorola put forward a report stating that Microsoft could earn close to $100 billion over the next five years if they used Motorola’s patents in their products. According to that report, $4 billion a year seemed like a fair amount. In retrospect, Microsoft’s $1 million offer seemed like peanuts for the company which owns the patents.

So far, there are no signs that either side is willing to let up. Unless and until the two can agree on a fair amount to be paid by Microsoft to Motorola, the issue will keep dragging on and on. As with most corporate trials, there seems to be no end to this. Given the fact bitter rival Google owns Motorola, Microsoft has all the more incentive to win the case and get the company to agree on the amount it is willing to pay.

It remains to be seen whether either party backs down or both of them keep fighting till a conclusion can be reached. Till then, the trial will continue to hog headlines. For now, Microsoft is in the clean with the injunction denied by the court.

[Image via itproportal]