In a closely watched technology patent dispute, a federal judge in Seattle this afternoon granted Microsoft’s motion for a temporary restraining order to prevent Motorola Mobility from blocking sales of Windows and Xbox in Germany, regardless of the outcome of a German court’s ruling in a related case.
The decision comes less than a week before a key ruling in that German case. It’s a subtle distinction, but the U.S. ruling doesn’t attempt to assert power over the German court but instead affects Motorola’s ability to act if the German court rules in its favor.
Motorola, which is in the process of being acquired by Google for $12.5 billion, had vehemently opposed Microsoft’s motion –saying that Microsoft was asking the U.S. court to “inject itself into foreign litigation proceedings in an entirely unwarranted manner.”
However, ruling from the bench in Seattle today, U.S. District Judge James Robart said issues including the balance of hardships and the question of potential harm weighed in favor of granting Microsoft’s motion.
If the temporary restraining order weren’t granted, the judge said, the situation had the potential to “place Microsoft in the position of negotiating in Germany with the threat of an immediate injunction hanging over its head.”
Judge Robart said his decision would stay in effect pending the outcome of further proceedings in the U.S. court.
“Therefore, you’re not rid of me,” the judge said to lawyers for both companies.
He required Microsoft to post a $100 million bond in the meantime to cover the potential of a future ruling against the company in the case. (Microsoft had offered to put up as much as $300 million.)
In the German court, Microsoft is facing the prospect of paying Motorola as much as 2.25 percent of sales on Windows and Xbox for their use of H.264 video standards. A decision in Germany is expected next week.
The case involves a running controversy over “standard essential” patents. As part of their participation in standards groups, companies generally promise to license patents involving standards on fair, reasonable and non-discriminatory terms, commonly shorthanded “FRAND.”
Microsoft argued in its motion for a temporary restraining order, “If left unchecked, Motorola’s ability to exclude Microsoft products that comply with the H.264 standard from Germany will enable Motorola to demand far more than the reasonable value of its patented invention; Motorola will be extracting the value of standardization itself.”
However, in earlier court filings opposing Microsoft’s motion, lawyers for Motorola said granting such a restraining order would be unprecedented. They wrote, “Microsoft has not identified any comparable circumstance in which a court in the United States has so dramatically interfered in the proceedings of a foreign court, and the Court should reject Microsoft’s gross overreaching.”
Following the ruling, Microsoft issued this statement: “Motorola promised to make its patents available to Microsoft and other companies on fair and reasonable terms. Today’s ruling means Motorola can’t prevent Microsoft from selling products until the court decides whether Motorola has lived up to its promise.”
Florian Mueller has more on the implications of today’s ruling in this blog post on FOSS Patents.