With the general manager of Microsoft’s Xbox hardware group on the stand in the company’s patent trial vs. Motorola, a federal judge in Seattle this morning cleared the courtroom of spectators and reporters at Microsoft’s request.

Exhibits in the case include secret details of the next-generation Xbox, code-named Durango. A Motorola lawyer was expected to question Xbox general manager Leo del Castillo about that future product as the Google-owned company makes its case for Microsoft to pay royalties for its use of Motorla’s patented wireless and video technologies in current and future products.

U.S. District Judge James Robart told the courtroom that he had erred on the side of keeping information in the case public, but agreed with the companies that certain information about contract terms and future products could be kept confidential in the case.

Earlier in the morning, under direct examination from a Microsoft lawyer, del Castillo downplayed the use of the technologies covered by Motorola’s patents. Microsoft says the Xbox 360 relies overwhelmingly on progressive scan video with minimal use of the interlaced video technology covered by Motorola’s patents related to H.264 video.

The Xbox 360 also now includes built-in 802.11 wireless support, another patented technology at issue in the case, but Microsoft says the significance of that feature pales in comparison to a blockbuster game like Halo or a new peripheral like the Kinect sensor in terms of driving sales.

Microsoft argues that Motorola’s original offer to charge Microsoft a royalty of 2.25 percent of the end product price was outrageous — potentially totaling $4 billion a year — considering Motorola’s promise to standards bodies to offer access to the “standard essential” patents on fair and reasonable terms.

The case is being closely watched as a potential blueprint for other patent disputes, and also because it’s effectively a dispute between Microsoft and Google, which has acquired Motorola Mobility. The judge is taking on the task of setting a fair royalty rate.

On the stand this morning, one of the exhibits shown by Motorola was a Forbes article quoting Microsoft CEO Steve Ballmer about the importance of the living room and the Xbox 360 to Microsoft’s broader strategy.

“You don’t have a basis to disagree with Mr. Ballmer?” asked the Motorola lawyer.

There was laughter in the courtroom as del Castillo smiled and indicated that he didn’t.

Update, 11:15 a.m.: Back in the courtroom, Microsoft calls an expert witness, Jerry Gibson, chair of the Department of Electrical and Computer Engineering at the University of California at Santa Barbara, who testifies that Motorola’s patents “have little to no technical value” to the Xbox 360 console.

Previously: Motorola wants to collect royalties on Microsoft Surface, too

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  • guest

    Okay, this is just getting embarrassing. For Google.

  • Allen

    You can patent building wireless into a device?

    • http://seainhd.com/ SEAinHD

      yes, if it was 15 years ago and wifi wasn’t common, then it would be considered a non-obvious innovation.

      I would love to see the patents they’re discussing for these lawsuits.

      • Walt French

        The whole deal about “standards-essential” patents is that a large part of their value to the user is that you can walk into a Starbucks, for example, and YOUR wifi laptop works on Starbucks’ network.

        Not that the particular networking techniques in 802.11 are fabulously better than anybody else could come up with. They should be obviously not inferior, but if a patent author won’t guarantee to license it reasonably, the standards group will find an alternative or go without.

        So I don’t think you’d really get a lot out of the particular encoding, timing, control signals, blah, blah. They might actually be tedious reading for anybody who isn’t an engineer designing the specific circuits. In fact, maybe they SHOULD be.

        The fun comes in separating the value of the standard from the patents that define it. After all, if a bunch of companies got together and insisted that you use their network protocol or do without, that’d look like an anti-competitive agreement. Hence, the promise to license the standards’ patents on reasonable terms — reasonable in terms of the work in creating them, not the benefit from being able to sell PCs that embody them. Not always simple, especially when firms have OTHER axes to grind.

    • guest

      No. But if you want to use the 802.11 wireless standard, which everyone does because otherwise your wireless link can’t connect to the rest of the 802.11 world, then you have to pay the owners of the patents that make up that standard. In this case that includes Moto and many others. But all had to pre-agree to license on fair and reasonable terms as part of being included in the standard initially. This case is not about having to pay. It’s about what constitutes fair and reasonable for Moto’s technologies within that standard. More specifically it’s about whether Google’s demands for those are excessive and violate the commitments they made to the standards body.

      • Allen

        802.11 is a standard owned by IEEE, which many, many companies have patent licenses to. I just don’t get why Googarola is suing, which would then seem to pave the way for hundreds of others to do the same thing.

        Obviously not a lawyer, but to the lay person, this just doesn’t make sense.

        • guest

          This is really a countersuit, which is a tactic that companies who are sued for patent infringement frequently employ. The original suit is MS v Moto and relates to Android. For MS (Apple, others) and Google, that’s the much bigger picture here. But this one is still very important because the patents Moto/Google are asserting are standards essential and meant to be licensed on “fair and reasonable” terms. But the definition of fair and reasonable is still open to some interpretation. And that has broad implications for everyone who has to license them, as well as for the holders.

  • Guest

    Shame on Google. Microsoft innovated its way into my living room. Google is trying to sue its way in.

  • mrstacy

    I agree this is bad form on Google’s part. But this is a response to Microsoft aggressive lawsuits against Android, so I can’t judge Google too harshly. They are just trying to use whatever leverage they can.

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