Microsoft says Motorola broke promises on patent royalties

Technical standards are set by agreement by competing companies so that devices from lots of companies will work together with each other and with other technologies. The standards agreed often involve technology covered by patents.

As part of the standard-setting process, patent owners whose ground is covered by standards will promise not to enforce their patent against the other companies, except for reasonable rates on a non-discriminatory basis. These are known as the FRAND (fair, reasonable and non-discriminatory) commitments.

Microsoft has claimed that Motorola is in breach of letters it submitted in the standard-setting process which promised to license any of the patents deemed 'essential' to video encoding and WLAN wireless technologies on reasonable and non-discriminatory basis.

"These standards are now implemented worldwide in a variety of electronic devices that have become commonplace. Microsoft invested substantial resources in developing and marketing products in compliance with these standards, relying on the assurances of participating patent holders – including Motorola – that any patents asserted to be 'essential' by such patent holders would be available for licensing on such terms, regardless of whether such patents were, in fact, used in any particular implementation," said Microsoft's legal complaint.

The company also said that as well as breaching the rules of the Institute of Electrical and Electronics Engineers Standards Association (IEEE-SA), Motorola's behaviour breached the common patent policy of the International Telecommunications Union (ITU).

"Motorola broke its promise to IEEE-SA and its members and affiliates by refusing to offer to Microsoft a license that is consistent with Clause 6 of IEEE-SA Standards Board Bylaws, instead demanding royalties that are excessive and discriminatory," said the complaint. "Motorola broke its promise to ITU and its members and affiliates by refusing to offer to Microsoft a license that is consistent with the Common Patent Policy of the ITU, instead demanding royalties that are excessive and discriminatory."

Microsoft has asked the US District Court for the Western District of Washington to declare that Motorola's promises to the standards bodies constitute contractual obligations.

Motorola has filed a patent counter-suit against Microsoft, alleging that its Windows operating system, messaging software, gaming software and search engine infringe on patents it holds.

"It is unfortunate that Microsoft has chosen the litigation path rather than entering into comprehensive licensing negotiations, as Motorola has mutually beneficial licensing relationships with the great majority of technology companies industry-wide," said Kirk Dailey, vice president of intellectual property at Motorola Mobile.