Motorola proposes patent settlement, Microsoft balks

Motorola Mobility, a Google subsidiary, has proposed a settlement to Microsoft regarding the two companies' ongoing patent dispute, Bloomberg reports. Motorola publicly announced the offer, but Microsoft "questioned whether the offer was serious," according to Bloomberg.

The two companies have been in separate legal battles involving Motorola's industry standard video compression patents (relating to H.264) and Microsoft's ActiveSync patents. Motorola's proposal would see Microsoft paying Motorola 50 cents for each copy of Windows sold (it continues to demand a 2.25 percent royalty for each Xbox 360 sale), while it would pay Microsoft 33 cents for any phone that uses Microsoft's ActiveSync software, Bloomberg revealed. Both Motorola and Microsoft are facing potential import bans for products associated with the lawsuits; if the bans are put in place, neither company would be able to sell its infringing products in certain territories, including the United States and some European countries.

Microsoft's reaction to the proposed settlement has been one of bemusement. In a statement, Horacio Gutierrez, Microsoft’s deputy general counsel for intellectual property, said Motorola's proposed settlement isn't a legitimate offer. Guiterrez and Microsoft have continued to claim that Motorola's demands don't fit industry standards for reasonable patent rates, particularly in regards to standards-essential patents.

"While we welcome any good faith settlement effort, it's hard to apply that label to a demand that Microsoft pay royalties to Google far in excess of market rates, that refuses to license all the Microsoft patents infringed by Motorola, and that is promptly leaked to the press," Guiterrez said. 

Motorola is also involved in patent discussions with Apple regarding the same H.264-related patents. Motorola's patents in questions are widely used in the industry, and Microsoft has argued the company needs to use FRAND (fair, reasonable and non-discriminatory) rates to all companies seeking to use the patents, which it claims the proposed settlement still lacks. If the settlement doesn't go through, both the Xbox 360 and some of Motorola's phones could be barred from sale in the coming months, pending any decisions issued by the respective governing bodies where the injunctions were requested.

Source: Bloomberg

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