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Judge slaps Motorola with $14.5M payout to Microsoft for FRAND abuse

post #1 of 48
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A federal jury has ruled that Motorola must pay Microsoft $14.5 million in damages, finding that the Google-owned smartphone maker breached its obligation to license standards-essential technology in a fair and non-discriminatory fashion.


image via TechnoBuffalo


In a closed-door ruling in Seattle, a federal jury found on Wednesday that Microsoft would effectively get a free license to use Motorola's portfolio of video and wireless standards-essential, with the handset maker required to pay Microsoft $14.5 million in damages. Commenting on the ruling, patent law expert Florian Mueller called the verdict one "that makes Google (Motorola) a convicted patent troll."

As the holder of a number of standards-essential patents ? that is: patents necessary for certain standardized technologies to function properly ? Motorola is required to license those patents to willing parties in a "fair, reasonable, and non-discriminatory" (FRAND) standards. FRAND issues were also at the center of a case between Apple and Motorola. That case, decided in Apple's favor, saw Motorola seeking to collect a 2.25 percent royalty from Apple over any iOS devices using certain industry standard wireless technologies.

In the case decided Wednesday evening, Motorola had asked Microsoft for a 2.25 percent royalty on the sale of each Xbox and certain Windows installations. Microsoft had said such a payment would amount to $4 billion per year and countered with an offer of $1.2 million per year. Initially, a U.S. district court judge decided on the case, setting a rate of $1.8 million per year paid from Microsoft to Motorola. Wednesday's decision reverses that previous ruling, with Motorola now required to pay damages to Microsoft.

Microsoft had been seeking about $29 million in damages from Motorola, with $23 million of that coming from Microsoft having to relocate a distribution center in Europe after Motorola won an injunction involving some of the patents.

Speaking on the case, Microsoft told The Inquirer that the win was great for the company, going on to slam Google for "continuing to abuse patents."

"This is a landmark win for all who want products that are more affordable and work well together," a Microsoft spokesperson said. "The jury's verdict is the latest in a growing list of decisions by regulators and courts telling Google to stop abusing patents."

A Motorola spokesperson expressed disappointment in the verdict, saying that the company is looking forward to an appeal of "the new legal issues raised in the case."
post #2 of 48

Waiting for GG to come in and claim Google has never "started" anything.

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post #3 of 48

$14 Million?!That's not going to deter anyone. Should have been $140m. 

post #4 of 48
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Originally Posted by EricTheHalfBee View Post
 

Waiting for GG to come in and claim Google has never "started" anything.

 

Don't forget " - Motorola is a totally separate company. Google has no control over what Motorola does!"

post #5 of 48
Quote:
Originally Posted by AppleInsider View Post

Commenting on the ruling, patent law expert Florian Mueller called the verdict one "that makes Google (Motorola) a convicted patent troll."

 

:lol:  :lol:  :lol:

post #6 of 48

Google & Motorola are beginning to become a nuisance to the industry. Stop patent trolling and create something genuine and innovative for a change !

post #7 of 48

Gatorguy ??  Guess this can be a continuation of this thread

 

Google isn't liable because Motorola Mobility is their wholly owned subsidiary.  Nice how legal separation seems to absolve the parent company of responsibility.


Edited by icoco3 - 9/5/13 at 2:16pm
post #8 of 48

Will Google ever get anything for that $12.5B they pissed away for Motorola?

 

If that was ever the plan, they seem to be moving in the wrong direction.

post #9 of 48
Excellent. Not enough to hurt Google (any one still believe that Motorola exists?) but enough to spank them for bad behavior. Kids need to learn that.
post #10 of 48
Originally Posted by pdq2 View Post
Will Google ever get anything for that $12.5B they pissed away for Motorola?

 

Another $12.5 billion in damages.

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post #11 of 48
Quote:
Originally Posted by EricTheHalfBee View Post

Waiting for GG to come in and claim Google has never "started" anything.

Google is working away on fixing this but they need a little more time. Their X-labs time machine is nearly finished which will allow Google to go back about three years, before Motorola Mobility existed. I've heard they intend to bump off Ballmer so that the Microsoft/Motorola legal journey never begins and Motorola never makes that initial licensing offer three years ago that this ruling was all about.

They're hoping they can influence Motorola to never spin off Motorola Mobility a year later too but they're not as confident with that one. Might still have to waste the $12B to keep Moto from going patent suit crazy.
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post #12 of 48

Too bad this isn't getting more coverage. Maybe people are looking at the $14.5 million and thinking it's not a big deal. It is. This represents a HUGE problem for Google/Motorola, Samsung and others who would try to abuse FRAND patents.

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post #13 of 48
Quote:
Originally Posted by pdq2 View Post

Will Google ever get anything for that $12.5B they pissed away for Motorola?

Sure they get to pay damaging charges over time.
post #14 of 48
$14.5 mil is just a drop in the $12.5 billion (and counting) bucket.
But it does add a touch of insult to injury.

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post #15 of 48
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Originally Posted by jdsonice View Post

Excellent. Not enough to hurt Google (any one still believe that Motorola exists?) but enough to spank them for bad behavior. Kids need to learn that.

Riiiiiiggggghhhhttttt. Like that'll stop Google from engaging in nefarious behaviour.

post #16 of 48
Quote:
Originally Posted by EricTheHalfBee View Post
 

Too bad this isn't getting more coverage. Maybe people are looking at the $14.5 million and thinking it's not a big deal. It is. This represents a HUGE problem for Google/Motorola, Samsung and others who would try to abuse FRAND patents.

$14.5 million ISN'T a big deal to Google, Samsung etc. It's like giving a drop of water to somebody in the Kalahari Desert - it's easily ignored.

post #17 of 48
Quote:
Originally Posted by monstrosity View Post
 

$14 Million?!That's not going to deter anyone. Should have been $140m. 

 

True, however it sets a precedent if in the future it doesn't get overturned. If Google/Moto tries the same crap against everybody else, they will have a harder time to defend against it because of this win and if the jury sees that Google/Moto is a serial patent troll, they'd likely to fine them higher over time.

post #18 of 48
I think Motorola peaked with their RAZR series of flip phones, & it's been downhill from there for them.

I agree the point should at the least be after the 5, not before it. So $145M not $14.5M.

Actually, how about a new worldwide rule / law regarding SEP / FRAND patents. You break the rules, you're found guilty of abusing them, you loose the rights for them against the other co you're trying to over charge etc, so they get to use them at no cost?
post #19 of 48
Quote:
Originally Posted by Gatorguy View Post

Google is working away on fixing this but they need a little more time. Their X-labs time machine is nearly finished which will allow Google to go back about three years, before Motorola Mobility existed. I've heard they intend to bump off Ballmer so that the Microsoft/Motorola legal journey never begins and Motorola never makes that initial licensing offer three years ago that this ruling was all about.

They're hoping they can influence Motorola to never spin off Motorola Mobility a year later too but they're not as confident with that one. Might still have to waste the $12B to keep Moto from going patent suit crazy.

Are you really this obtuse or is it just a show for Google's benefit?

Google could have put a stop to most of this litigation the day after the acquisition if they had wanted to. Even this one would have had a lot less damages if Google had shut it down early.

Stop playing the fool.
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post #20 of 48

..."that makes Google (Motorola) a convicted patent troll."

 

Larry, stop crying boy. Let mama & dada take care of ya! Wasted like what $12B +, eh? ROFLAMO

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post #21 of 48
Quote:
Originally Posted by Lord Amhran View Post
 

$14.5 million ISN'T a big deal to Google, Samsung etc. It's like giving a drop of water to somebody in the Kalahari Desert - it's easily ignored.

 

Gee, didn't I already say that in my post? This is not about the money - it's about being convicted for breach of trust over abusing FRAND patents. This is a precedent setting case which will put a serious damper on all the patent abuse being instigated by Samsung, Google, Motorola and others. This case will be used as a reference for other cases.

 

BTW, Motorola was asking for a couple billion dollars from Microsoft and ended up getting a couple million dollars. Or about 1/1000 of what they were asking. MS was asking for $23 million in damages and got $14.5 million, or about 2/3rd. Tell me, who got close to what they were asking and who ended up with pesos?

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post #22 of 48
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Originally Posted by jragosta View Post


Are you really this obtuse or is it just a show for Google's benefit?

Google could have put a stop to most of this litigation the day after the acquisition if they had wanted to. Even this one would have had a lot less damages if Google had shut it down early.

Stop playing the fool.

 

Don't forget they're going to appeal this as well.

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post #23 of 48
Google saying Do no evil is like a used car salesman saying trust me.
post #24 of 48
Uh Oh. Click.
post #25 of 48
Haha Googlerola!
post #26 of 48
Oh joy! Goolies, a convicted patent troll. Now that is an honour I don't think we'll see Larry and friends raising before the board or in public prattling. Dang, we'll have to do it for them. So much joy on joy today.

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post #27 of 48
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Originally Posted by pdq2 View Post

Will Google ever get anything for that $12.5B they pissed away for Motorola?

If that was ever the plan, they seem to be moving in the wrong direction.
Now arithmetic is not my strong suit, but isn't that $12.5145B now?

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post #28 of 48
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Originally Posted by mhikl View Post

Now arithmetic is not my strong suit, but isn't that $12.5145B now?

Actually, no.

The reported $12.5 B figure is grossly overstated. There was a ton of cash that reduces the net cost. There were also a lot of tax credits carried forward that also have some value.
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post #29 of 48

Why Google ever thought that using Standards Essential Patents to restrict the competition would work is beyond me.  The contractual language on those things are pretty clear.  What, did they retain the same lawyers as Samsung?

post #30 of 48
Quote:
Originally Posted by icoco3 View Post
 

Gatorguy ??  Guess this can be a continuation of this thread

 

Google isn't liable because Motorola Mobility is their wholly owned subsidiary.  Nice how legal separation seems to absolve the parent company of responsibility.

 

GoogleGuy.

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post #31 of 48
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Originally Posted by Suddenly Newton View Post

GoogleGuy.

Watch what you say. I almost got banned for saying that.
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post #32 of 48

"This could get more costly than yesterday's verdict: the EU can impose fines of up to 10% of annual revenues."  - Fosspatents.com

 

I'm waiting for the other shoe to drop. Let's hope the EU has a stronger bite than the FTC.

post #33 of 48
Quote:
Originally Posted by pdq2 View Post
 

Will Google ever get anything for that $12.5B they pissed away for Motorola?

 

If that was ever the plan, they seem to be moving in the wrong direction.

 

Google got Motorola Mobility to stop going after other Android phone makers with their patent trolling. At the time (and still is), Motorola Mobility was losing about $500 million a quarter, but saw the likes of Samsung, LG and HTC making money. And they were making money selling phones that were using some of Motorola Mobility patents. Motorola CEO let it be known that he wasn't going to stand for this and was going to increase the licensing fee for every company using their patents. Google couldn't let that happen, so they were willing to way over pay for Motorola Mobility to stop this. Notice that you don't hear anything about Motorola hitting Samsung with a license fee that is 2.5% of the total cost of a Galaxy phone.  Google made sure that Motorola Mobility only went after Android competitors with their patent trolling. No matter what some one say about MM being a separate division of Google and that Google has no direct control over their business decisions. 

post #34 of 48
Quote:
Originally Posted by Tallest Skil View Post

Another $12.5 billion in damages.

... and I'm thinking, Balmer got Nokia for $7.2 billion. Arguably better brand, for almost half the price.

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post #35 of 48
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Originally Posted by nikon133 View Post


... and I'm thinking, Balmer got Nokia for $7.2 billion. Arguably better brand, for almost half the price.

The man is rough diamond 1wink.gif

 

Well, ad the subsidies MS was paying Nokia ($1 bn p.a. since announcing the partnership in 2011), which will not be returned, marketing support (unknown, some analysts put it at $3 bn for WP7 and WP8), and the $16 bn MSFT stock dropped immediately after announcing the deal, just to acquire a company that makes higher losses in a year than what Moto lost since Google acquired them and losing the only relevant WP licensee at one fell swoop... I would have second thoughts here.

 

Nokia is the better brand, no doubt. But bringing 32,000 European staff members along, winding this up will be very costly.


Edited by dreyfus2 - 9/5/13 at 9:51pm
post #36 of 48
Quote:
Originally Posted by ronn View Post
 

"This could get more costly than yesterday's verdict: the EU can impose fines of up to 10% of annual revenues."  - Fosspatents.com

 

I'm waiting for the other shoe to drop. Let's hope the EU has a stronger bite than the FTC.

 

Sorry to say, but the EU fine will not be anywhere around 10% of annual revenues. This only ever happens when companies continue their misconduct once an investigation has been opened. They were clever enough to withdraw all claims immediately once this happened.

 

It is pretty hard to estimate the fine under these circumstances, but even if they are found to be "guilty", the limit would normally be around 3-5% of revenues in affected member countries (can be as low as 1% in minor cases) - whatever this would be.

post #37 of 48
How's that $12B 'investment' working for you, Google?
post #38 of 48
Quote:
Originally Posted by jkichline View Post

How's that $12B 'investment' working for you, Google?

 

We will all find out when MS will launch the, inevitable, attack on the Moto-X. Google's idea to bypass the ITC (and give it a patriotic twist) by assembling the device in the US... will have MS go ballistic. People, stash popcorn.

post #39 of 48
Quote:
Originally Posted by mhikl View Post

Now arithmetic is not my strong suit, but isn't that $12.5145B now?

Actually it's even bigger then that. We can't forget that Google has had to pay off the losses MotoMo has run up the last couple years. I don't remember all the numbers, but once it half a billion in one single lump. Couple be around a couple billion by now. In all fairness Google did get some money back when they unloaded the set top box business that was part of the MotoMo purchase.
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post #40 of 48
Quote:
Originally Posted by dreyfus2 View Post

Well, ad the subsidies MS was paying Nokia ($1 bn p.a. since announcing the partnership in 2011), which will not be returned, marketing support (unknown, some analysts put it at $3 bn for WP7 and WP8), and the $16 bn MSFT stock dropped immediately after announcing the deal, just to acquire a company that makes higher losses in a year than what Moto lost since Google acquired them and losing the only relevant WP licensee in one fellow swoop... I would have second thoughts here.

Nokia is the better brand, no doubt. But bringing 32,000 European staff members along, winding this up will be very costly.

I'd like to see MSFT try to impose "Stack Ranking" dismissals on a group of Europeans. A writer on one of the other blogs asked, "Who bought whom?"

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