Google's Motorola was dealt a setback in its bid to land major royalty payments from Microsoft for sales of Windows and the Xbox.
A Seattle judge last week handed down an opinion that laid out how much Microsoft should pay for using technology patented by Motorola in its products - and it was a lot less than the billions Motorola wanted.
Specifically, US District Judge James Robart found that the Redmond firm should pay 0.555 cents for products that use advanced video coding patents (like Windows and Xbox), and 3.471 cents for those that use a wireless patent (like the Xbox).
"This decision is good for consumers because it ensures patented technology committed to standards remains affordable for everyone," David Howard, Microsoft's corporate vice president and deputy general counsel, said in a statement.
"Motorola has licensed its substantial patent portfolio on reasonable rates consistent with those set by others in the industry," a Motorola spokeswoman said in a statement.
Microsoft, however, had argued that the 2.25 per cent per product originally requested by Motorola would have cost it an exorbitant $4 billion per year.
The case dates back to 2010, when Microsoft and Motorola tried to hash out a patent licensing agreement over 802.11 wireless local area network (WLAN) and H.264 advanced video coding patents. The patents are considered to be standards essential, meaning that most high-tech devices currently utilise the technology. Companies that own the patents, therefore, need to license them under reasonable and non-discriminatory (RAND) terms, even to rivals.
Microsoft uses the technology covered by the patents in everything from its Xbox gaming console to the Windows platform. Back in October 2010, Motorola offered to license the 802.11 and H.264 patents to Microsoft at a rate of 2.25 per cent per product sold. Microsoft, however, argued that the rate was unreasonable and filed suit, and the two have been at loggerheads ever since.
The issue was considered during a trial that ran from November 13-21, and the judge released his decision this week.
As noted by Bloomberg, the two sides are set to face off at an August trial that will determine whether Motorola has offered patent licenses on fair terms.