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April 02, 2012

Microsoft News - Motorola, Microsoft Battle it out over Patent Issues

By Nick Ruble, TMCnet Contributing Writer

Motorola (News - Alert) Mobility has been working just as hard to halt sales of Microsoft’s Xbox, as Microsoft has been to ban US imports of Motorola’s Android powered handsets. The dispute started back in 2010 when Microsoft (News - Alert) implemented some of Motorola’s patented technology in the Xbox gaming console.

The problem is, they were both so caught up in collaborating on a Windows mobile phone (which failed miserably) that neither really took action on getting the legal aspects of the Xbox patents worked out.

In a filing on March 30, Microsoft announced, "Motorola's demand was so over-reaching that no rational company could ever have accepted it or even viewed it as a legitimate offer.”

Motorola presents the same licensing offer to every company that wants access to any of its patented material – a 2.25 percent royalty on the total value of the finished product. However, since it never pushed for the agreement with Microsoft when they were both working so hard on the failed Windows phone, Microsoft never made an attempt to fill out any paperwork for Motorola.

To make a long story short, both software makers slacked off on taking any legal action where it was clearly due, now they’re fighting like a couple of children over who gets to ride in the front seat on the way to school.

What’s more, Microsoft has gone as far as completely moving its European logistics center from Germany to the Netherlands all because of the dispute. It also requested that the court prevent Motorola Mobility from obtaining a ruling in Germany that would limit the sales of Microsoft products in the country – which is somewhat understandable, in contrast to their decision to pack up and move to a whole new country.

It’s hard to tell how things will turn out in the end, but it’s looking an awful lot like Microsoft will come out on top. Motorola’s pushing it a little bit; after all, if it would have taken action right away, when it should have, there would be no complications in determining who owes who $4 billion a year in royalties.

Edited by Carrie Schmelkin

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