Microsoft and Motorola can't come close to an agreement on how much the software giant should pay for the right to use the Google-owned company's patents.
In court filings released yesterday and obtained by Reuters, Microsoft indicated that it would be willing to pay as much as $502,000 per year to license Motorola's H.264 patents. The company would also pay as much as $736,000 for Motorola's 802.11 wireless technology.
Motorola, meanwhile, had a much different take. That company has stuck to its guns, saying that a simple fee wasn't enough, and Microsoft should be required to pay a percentage of the selling price of the allegedly infringing products to Motorola. The royalty on H.264 technology should be 2.25 percent, amounting to between $100 million and $125 million per year in fees, Motorola argued, according to Reuters. The mobile company wants a royalty payment of 1.15 percent to 1.73 percent for its Wi-Fi patents, potentially earning it tens of millions of dollars more each year.
Microsoft and Motorola have been deadlocked on what they believe are fair royalty payments over the software giant's use of the mobile company's patents. Microsoft argues that the H.264 patents, which relate to video technology, as well as the Wi-Fi patents, should be offered at a fair rate because they are standard-essential intellectual property. In order for companies to license standard-essential patents, they must request fees that are considered fair, reasonable, and nondiscriminatory (FRAND).
Microsoft has been outspoken about its belief that Motorola is acting unfairly with its 2.25 percent royalty request. In a blog post in February, Microsoft vice president and deputy general counsel Dave Heiner said that Motorola wants $22.50 in royalties for each Windows-based laptop sold on the open market. Those laptops, he said, rely on 50 H.264 patents from Motorola. However, in order to get H.264 onto laptops, Microsoft needs to license over 2,300 patents from 29 other companies that also own some intellectual property related to the technology. Altogether, those companies charge "2 cents for use of more than 2,300 patents."
Motorola has also charged that the
Xbox violates its patents.
Motorola and Microsoft last month held a trial over patent royalties. The court is expected to deliver a final verdict on how much Microsoft will have to pay next year. The same court attempted to have Microsoft and Motorola solve the royalty issue out of court, but the companies couldn't come to an agreement.
Microsoft, Motorola over $100 million apart on patent fees
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Microsoft, Motorola over $100 million apart on patent fees
