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.