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Motorola proposes settlement offer in Microsoft patent fight

Motorola has reportedly proposed a settlement that would end its patent dispute with Microsoft, but it does not appear that Redmond is ready to sign on the dotted line.

As reported by Bloomberg, Motorola Mobility has offered to pay 33 cents (20p) for every Motorola phone that uses Microsoft ActiveSync. In exchange, Microsoft would pay 50 cents (30p) for Windows-based devices that use Motorola-owned technology.

According to Microsoft, Motorola has offered to pay Microsoft 33 cents (20p) for each Android phone using ActiveSync, and asked for a royalty of 2.25 per cent on each Xbox and 50 cents (30p) per copy of Windows for using its patents.

"While we welcome any good faith settlement effort, it's hard to apply that label to a demand that Microsoft pay royalties to Google far in excess of market rates, that refuses to license all the Microsoft patents infringed by Motorola, and that is promptly leaked to the press," Microsoft said. "At a time when the FTC, prominent members of Congress and leading companies from across the industry are expressing concern about Google's refusal to honor its obligations to standards bodies, this appears to be little more than an effort to change the subject."

In a statement, Motorola said the offer is "just one piece" of the Microsoft-Motorola patent puzzle. If Microsoft accepted, it "would get the focus back on competing in the marketplace," a Motorola spokeswoman said.

"More than 50 companies - including, big, household names - have worked out licenses with us. Just two are complaining, not because they don't like our price, but because they seemingly won't accept any price," the spokeswoman continued. "Microsoft's strategy of using patent trolls to do its bidding in a mobile market it's lost, and Apple's 'thermonuclear' threats, make it very hard to believe we're dealing with good-faith negotiators."

Microsoft and Apple need to respect Motorola's contributions, she concluded.

Google completed its acquisition of Motorola Mobility in May.

The proposal comes about a month after an International Trade Commission administrative law judge recommended a ban on the Xbox in the US over patents, though his findings require approval by the full commission.

According to Bloomberg, Motorola previously requested that Microsoft pay a royalty rate of 2.25 per cent of the cost of any infringing products, which includes the Xbox. Microsoft, however, said that would amount to $4 billion (£2.5 billion) per year and violated Motorola's pledge to license its "essential" patents at fair and reasonable rates.

But Kirk Dailey, vice president of intellectual property for Motorola Mobility, disputed those numbers and told Bloomberg that the 50 cent (30p) price means that if Microsoft sold 300 million copies of Windows, royalty payments would amount of $150 million (£96 million).

"Injunctions are an extreme remedy, but not when you've been negotiating with someone for years with no movement, and who is actively seeking to destroy a competitor ecosystem," Dailey said.

In April, the European Commission formally opened a patent abuse investigation into Motorola.

The full ITC will rule on the Xbox issue in August.

The case dates back to late 2010, when the two companies sued each other multiple times over patent issues.

Motorola is also battling Apple over patents. Recently, a US judge reversed course and said he will allow Apple to pursue an injunction against Motorola devices.