Microsoft wins restraining order in Motorola patent case

A U.S. court has granted Microsoft Corp. a restraining order to prevent Motorola Mobility Holdings Inc. from taking action based on a ruling expected from a German court later this month, the latest twist in a year-and-a-half old transatlantic dispute.

On Wednesday, the U.S. District Court in Seattle granted a restraining order preserving Microsoft's ability to sell in Germany its Windows software, Xbox 360 and other products that rely on the video patents at issue in a battle with Motorola.

A German court is scheduled to rule April 17 on a separate motion by Motorola for an injunction to prevent sale of those products there. The restraining order from U.S. District Judge James Robart bars Motorola from taking steps to carry out injunctive relief it may be granted by the German court until the U.S. court has had time to rule on an original patent case filed in Seattle.

The motion isn't aimed at halting the German court from issuing its ruling, according to people familiar with the matter. Redmond, Wash.-based Microsoft claims the patents at the heart of the case are part of a group of technologies many companies have agreed to share. Motorola alleges that Microsoft's use of those patents violates that agreement.

"Today's ruling means Motorola can't prevent Microsoft from selling products until the court decides whether Motorola has lived up to its promise," Microsoft attorney David Howard said in a statement. At issue are the rights of companies to license patents from one another under reasonable and nondiscriminatory terms, or RAND terms, if the patents are part of industry standards. The U.S. judge also ordered Microsoft to post a $100 million bond for potential amounts owed Motorola.

"Our focus from the outset has been to receive fair value for our intellectual property based on Microsoft's use of MMI's patented technology," Motorola said in a statement.

In filings, Microsoft alleges Motorola is violating RAND terms by demanding Microsoft pay patent royalties of 2.25% of the price of end-user products that incorporate the standard, which would total about $4 billion annually. Microsoft alleges those are discriminatory terms.

Microsoft first filed suit against Motorola in October 2010 in U.S. District Court and the International Trade Commission. Motorola countersued in the same U.S. venues, arguing Microsoft infringed on the patents in question, as well as some additional patents.

In July, Motorola filed a claim on the same patents in Mannheim Justice Court in Germany. In September, Microsoft filed a separate claim on its patents in a Munich court.

The patent at issue in the case is for video compression software, commonly referred to as a video codec. A specific Motorola codec has become an industry standard because of its good video quality and ease of use. Dozens of companies incorporate the codec into products, including Microsoft, which employs it in Windows 7, Internet Explorer 9, Windows Media Player and its Xbox 360 game console.