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The patent trial pitting Microsoft vs. Google’s Motorola Mobility is getting underway in federal court in Seattle, with a standing-room-only crowd of lawyers and other observers packing the courtroom of U.S. District Judge James Robart. The judge started the morning by saying he hasn’t seen this many people in the room since the case over the constitutionality of Seattle’s strip club ordinance.

“I’m hopeful that once you realize how boring this is that you’ll clear out,” he said.

Microsoft and Motorola, along with others involved in the case, are jockeying to prevent the public release of confidential documents by keeping certain trial exhibits under seal.

One of the documents that Microsoft mentioned this morning that it wants to keep under wraps deals with “Durango” product specifications — a reference to the code name for Microsoft’s next-generation Xbox game console. The case deals in part with technologies implemented in the Xbox 360 console.

The case is being closely watched across the technology industry because of its implications for the licensing of patents that are considered essential to implementing industry standards. The judge will be determining “reasonable and non-discriminatory,” or RAND, royalty rates for Motorola’s video and wireless patents.

Microsoft contends that Motorola has been seeking unreasonable royalty rates. Microsoft argues that Motorola’s offer to license the patents to Microsoft for 2.25 percent of the end product price was outrageous, considering Motorola’s promise to standards bodies to offer access to the patents on reasonable terms. Motorola contends that Microsoft gave up its right to a reasonable royalty by filing the lawsuit in response.

Jon DeVaan, a senior Windows exec, is testifying now, discussing the implementation of H.264 video in Windows, and downplaying the use of interlaced video in Windows. Microsoft contends, in part, that the royalty rate should be proportional to the contribution of the patented technology to the products it’s used in.

Update, 12:20 p.m.: The second morning session featured testimony from , Garrett Glanz, Microsoft general manager of intellectual property licensing, delving into the industry talks for the MPEG-LA H.264 patent pool. Motorola was a participant in those talks, and initially argued for a cap on royalties, but ultimately withdrew, according to the testimony. 

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