Microsoft Deputy General Counsel Dave Heiner in a posting confirmed company was echoing Apple’s strategy and filing a formal complaint against Motorola with the European Commission. The new dispute, like Apple’s, alleges that Motorola is abusing standards-based patents by trying to charge unreasonable rates to license technology. Microsoft’s case centered around elements like the H.264 video codec and Wi-Fi that are at the heart of Motorola’s lawsuits both in Europe and the US.
The legal head and company VP argued that Motorola wasn’t just throwing the concept of a standard into doubt but threatening to break basic technology, since a ban on Microsoft’s use would prevent many from watching videos and getting online. “Imagine what a step back it would be if we could no longer watch videos on our computing devices or connect via Wi-Fi, or if only some products, but not others, had these capabilities,” Heiner said. “That would defeat the whole purpose of an industry standard.”
He added that Motorola was asking the same 2.25 percent royalty cut for the total price of a product, not individual components, that was being wielded against Apple over 3G. As an example, a $1,000 notebook would send $22.50 just to Motorola where the royalties owed to 29 other companies amounted to just two cents, or 20 cents at most. Attaching the royalty to the total product cost and not just Windows purportedly led to a disproportionate cost: a notebook twice as expensive would give Motorola $45, even if the H.264 and Wi-Fi uses didn’t cost any more to implement than they did on the $1,000 PC.
Also singled out was Google’s apparent hesitance to foreswear lawsuits over standards. Apple, Cisco, and Microsoft had all made pledges not to sue over standards patents under any condition, but the current refusals by Google and Motorola had cast doubt on the sincerity of wanting solely to protect Android. It was ironic that a company that wanted to protect the Internet was willing to risk breaking it, Heiner thought.
Microsoft did partly call its own sincerity into question by claiming that its own Android licensing system was an example of how to license properly. Although it has had some claims upheld by the ITC, others have been cast into doubt, both for validity and for the motivations that led Android makers to sign. Barnes & Noble revealed that it was being forced to sign a non-disclosure deal just to find out the exact licensing disputes leveled against it, making it impossible for the company or outside patent experts to publicly challenge Microsoft on its word. Many have noted that Microsoft makes more money on Android than Windows Phone and that companies often get licensing discounts if they agree to make Windows Phones, artificially boosting the platform’s device share.
The EC complaint still increases the pressure on Motorola and its expected future parent Google now that there is a wider consensus on a possible issue with standards patents. As with Samsung, Motorola’s only real defenses against lawsuits from Apple and Microsoft revolve around standards, and being forced to license at lower rates would leave it in a position of likely having to settle.
