Motorola loses battle to ban Microsoft’s Xbox 360 in US and Germany

Microsoft won a crucial battle in its ongoing patent war with Motorola this week as an International Trade Commission judge rules that the Xbox 360 won't be banned from sale in the US and Germany.

It’s been some time since we last heard about Motorola’s international patent war with Microsoft. Earlier this year it one International Trade Commission judge actually recommended that the Xbox 360 be banned from sale in the United States until Microsoft agreed to pay Motorola billions in owed royalties. Now the ITC committee gathered to render final judgment on the dispute has made a decision: The Xbox 360 will not be banned from sale in the US.

At the center of the dispute are technologies related to ActiveSync technology, an app that lets Microsoft’s devices and software (Xbox, Windows, etc.) sync with mobile devices. Motorola claimed ActiveSync, as well as other video encoding and wi-fi connection technologies, in Microsoft’s products violated its patents and demanded royalties as compensation. For example, Motorola wanted a 2.25 percent royalty fee on every Xbox 360 sold, costing Microsoft $1 billion in fees on the Xbox business alone. In total, Microsoft would have ended up paying Motorola $4 billion per year in royalties related to all its products.

Microsoft didn’t deny that it should be a fee to Motorola for using these technologies. It claimed that the Google-owned company’s demands were unreasonable since the tech in question were industry standards and FRAND commitments dictate that Motorola needs to license them at reasonable rates. Motorola wanted $4 billion, but Microsoft said it should only pay $1 million.

Judge James Robart sided with Microsoft on Tuesday, determining that Motorola’s patents did indeed relate to FRAND-type technologies. Robart decided that once a reasonable fee is determined, Microsoft will have to pay that. A jury will determine whether that fee turns out to be at the hefty 2.25 percent rate Motorola sought at a later date. That rate will be the starting point for ongoing negotiations.

Microsoft didn’t only get off the hook in the US. Motorola was also seeking a ban on the Xbox 360 in Germany, another legal landscape it was hoping to gain a foothold against Microsoft in. It was actually awarded the ban in May but that’s not been struck down.

Even though it was doubtful the Xbox 360 would have been pulled from store shelves in the US, a number of organizations sprang to Microsoft’s defense in the case last summer. Both the Entertainment Software Association and Activision Blizzard submitted statements to the ITC opposing the band claiming that multiple industries and corporations would “suffer commercial harm” by a potential ban.