Reporting from federal court: Microsoft’s patent dispute with Motorola focuses largely on technologies used by Windows and the Xbox 360, but the Redmond company’s new Surface tablet computer has been the subject of a couple questions today, on the opening day of the closely watched patent trial at U.S. District Court in Seattle.

Why? It turns out that Motorola wants the judge to also consider new and future Microsoft products that implement Motorola’s patented technology as he figures out how to set the royalty rates that Microsoft should pay for Motorola’s patents. 

In a brief filed in advance of the trial, Motorola contends that 802.11 WiFi technologies are critical to Surface, because it doesn’t have an Ethernet port or cellular broadband.

Lawyers for Motorola write, “Microsoft’s new Surface tablet will use only 802.11, instead of cellular or wired connections, to connect to the internet. Without 802.11 capability, the Surface tablet would be unable to compete in the market, because consumers can readily select tablet devices other than the Surface that have 802.11 capability.”

Motorola contends that the judge’s deliberations “would need to account for the likely use of Motorola 802.11 SEPs [standard-essential patents] in future products (e.g., Microsoft’s recently released Surface tablet product).”

That’s important because the amount Microsoft is required to pay could depend on the significance of the particular patent in the final product. A lawyer for Microsoft told U.S. District Judge James Robart this morning that the amount paid by Microsoft in licensing fees should be proportionate to the contribution of Motorola’s patents to the relevant industry standard, and to the role of the patented technology in the Microsoft products that implement the standard.

Making the case for higher royalties, the Motorola brief also noted that Microsoft “apparently is working on its own smartphone, which undoubtedly will have Wi-Fi capabilities,” citing a Wall Street Journal story as evidence.

On the stand this morning, Windows executive Jon DeVaan also acknowledged that Surface incorporates H.264 video technologies, which are also at issue in the case, covered in separate Motorola patents.

Microsoft argues that Motorola’s original offer to license patents to Microsoft for 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.

Motorola contends that Microsoft gave up its right to a reasonable royalty by filing the lawsuit in response to Motorola’s initial royalty demand.

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.

Much of the testimony today has focused on talks among Microsoft, Motorola and others to create a patent pool related to H.264 technologies. According to the testimony from Microsoft intellectual property licensing GM Garrett Glanz, Motorola withdrew from that patent pool after initially arguing for royalty caps.

Follow me @toddbishop on Twitter for more from the courtroom.

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  • guest

    “Motorola contends that Microsoft gave up its right to a reasonable royalty by filing the lawsuit in response to Motorola’s initial royalty demand.”

    That’s the most asinine argument I’ve heard from Moto yet.

    • fiend

      Do you understand law?

      • guest

        Yes, and apparently much better than you do

    • symbolset

      It’s not unreasonable or unfair for Motorola Mobility (now a division of Google) to demand that someone using their patents pay something for them, and make Microsoft an initial offer of license for a fee. It is unreasonable and unfair for Microsoft to sue for protection of the courts before at least making a counter offer and participating in negotiations. The courts are not there to participate in the negotiation of every used car sale and patent license.

      • Joe_HTH

        Are you high? Motorola is asking for billions per year for less than 50 FRAND patents. There is absolutely nothing reasonable about that, especially considering Microsoft pays 23 other companies 6 million per year for the use of 2300+ FRAND patents, including Wifi and H.264 patents.

        Motorola is a failed company that makes shit products. They’ve lost money 15 out of the last 17 quarters and they’re trying to make it off the backs of Microsoft and Apple, because they can’t make it legitimately. They’re going to lose, as they’re already being investigated by the FTC and the European commission. The FTC has already recommended filing suit.

      • guest

        Nobody, including MS, said it was. The issue is what constitutes fair and reasonable given that these are SEP patents covered by FRAND, unlike MS’s patents in the earlier Moto case which this suit is a clumsy response to. It is not unreasonable for MS to interpret a ridiculous demand from Google as showing a lack of good faith and instead asking the court to intervene. And $4 billion is hardly “every used car sale and patent license”. But I understand that part of being a die hard troll, as you are, is having to talk out of both sides of your mouth on a nearly continuous basis.

  • ZAndooo

    You know how that goes! Give em an inch, they take a yard lol

  • Brent

    Why do you say “Motorola” when it’s Google making these decisions? It’s not a technicality.

    • Todd Bishop

      Hi Brent. Good point, and I noted the Google acquisition above, but the named party in the court case is technically Motorola Mobility.

  • Ricardo Parker

    Yay MS. Take some of your own venon. How will it feel?

    • guest

      Bitter much?

    • Joe_HTH

      LOL! Considering they’re going to win this case, they will feel real good.

  • Nee

    MS is famous for that…

    • Kenshin himura

      For stealing? please that is like saying Apple invented the PC freaking moron.

      Google is simple trying to punch MS so the can delay them on more innovating the tablet market.

      Yep, MS is at the moment the most innovating company in the tablet market.

      The best nope but the most innovating yes.

  • Joe

    MS gets $10-15 per device from Samsung & HTC for Android. 2.5% sounds reasonable to me

    • Joe_HTH

      Microsoft’s patents that are license by Android OEMs are not FRAND or standards essential patents dumbass. Learn the difference.

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