Motorola Fails in Legal Bid To Block Xbox 360 Sales In US And Germany

Question now shifts to proper rate for patent licensing fees

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A U.S. judge has rejected Motorola’s (NYSE: MSI) attempt to ban sales of Microsoft’s (Nasdaq: MSFT) Xbox 360 video game console in the U.S. and Germany over an alleged patent dispute, the BBC reports.

This is the latest development in an ongoing legal battle between Motorola and Microsoft, with Motorola charging Microsoft with breaching several of its connectivity and video-coding patents in the development of the popular Xbox 360 console. Beginning in 2010 with a suit filed by Microsoft against Motorola, Motorola’s counter-suit seemed to be winning over judges’ favor by last May, and the possibility was raised of Xbox 360 sales being blocked in the U.S. and parts of Europe.

Microsoft was not challenging the need for a fee but instead was disputing the amount that it would be required to pay Motorola in royalties for the patents.

Motorola was trying to claim $4 billion pe year for use of its patents, but Judge James Robart in Seattle, Wash., denied the request on the grounds that patents in question were Frand-type innovations -- inventions that are recognized as “critical to industry standards and should be therefore be licensed on fair, reasonable and nondiscriminatory terms.”

The new ruling is also applicable in Germany, where the Xbox 360’s distribution was originally blocked in May. At the time of the German court ruling, Motorola was granted the right to ban the 360 along with Microsoft’s Internet Explorer Web browser and the Windows Media player.

A judge at the U.S.'s International Trade Commission, or ITC, subsequently recommended that an import and sales ban of Microsoft's games consoles, which are manufactured in Asia, be pushed through on related grounds, but the enforcement was pending a U.S. court’s approval.

Despite the ruling in Microsoft’s favor, the company is still likely to face a fine expected to be somewhere in the range of $1 million per year. Legal deliberations will now instead move to determine the proper rate.

Shares in Motorola rose slightly during Tuesday trading, reaching $54.68 per share in early morning trading. Microsoft shares dipped slightly to $26.34. 

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