Microsoft filed suit against Motorola on Tuesday after, it said, it tried unsuccessfully to get the U.S. cell phone maker to license Motorola patents that have been incorporated into international standards under "reasonable and non-discriminatory" (RAND) terms. The charge? Breach of contract.
The move comes not quite six weeks after Microsoft (NASDAQ: MSFT) sued Motorola (NYSE: MOT) for -- the software maker alleges -- infringing patents that it owns, which are used in Google's Android mobile device operating system. Motorola makes smartphones based on Android.
The new suit appears to have little or nothing to do with the earlier one, however.
Whereas, the earlier suit accuses Motorola of improperly using patented technology without permission, the new one is about Motorola demanding what Microsoft feels are exorbitant royalties for patents that have been incorporated into an international video standard called H.264.
Microsoft's new lawsuit states that Motorola has been unwilling to license the patents it provided as part of the standard at what it feels fit the norm for RAND pricing.
Additionally, Microsoft argues, in order for a patent owner to get a technology accepted for use in an international standard, the intellectual property holder is required to provide letters of assurance that any patent royalties will fit the RAND model. The idea is that no one wants to use a technology that is certified as an international standard, and then be forced to pay high royalties once the standard has been adopted.
In the filing, the points of contention circle around H.264's use in Xbox 360 game consoles as well as some related wireless patents.
"Microsoft made its decision to provide its Xbox video game consoles with H.264 technology in reliance on, and under the assumption that, it and/or any third party supplier could avoid patent litigation and take a license to any patents that Motorola, or any other company, has disclosed to the ITU [International Telecommunications Union] under its well-publicized IPR policy," the filing said.
However, Microsoft's legal team appeared to signal that there is much more at stake. Microsoft has committed to use H.264 as the only video codec supported in its upcoming Internet Explorer 9 browser. Apple (NASDAQ: AAPL) has as well.
"Microsoft made similar investments in other fields, including Windows 7 and Windows Phone 7, based upon Motorola's representations in relation to the H.264 technology standards," the filing added.
In a statement e-mailed to InternetNews.com, a Microsoft spokesperson tried to clarify the reasoning behind the lawsuit.
"Microsoft filed an action today in the U.S. District Court for the Western District of Washington against Motorola, Inc. for breach of Motorola's contractual commitments to the Institute of Electrical and Electronics Engineers (IEEE) and the International Telecommunications Union (ITU) to license identified patents related to wireless and video coding technologies under reasonable and non-discriminatory terms and conditions. Those commitments are designed to benefit all parties that rely upon these standards, and Microsoft has been harmed by Motorola's failure to honor them in recent demand letters seeking royalties from Microsoft," the Microsoft statement said.
Meantime, Motorola had an official response to Microsoft's suit.
"Consistent with Motorola's normal licensing practices, we worked with Microsoft to reach an agreement that would have allowed Microsoft to use our proprietary technologies without infringing Motorola's patents. Unfortunately, despite a fair offer from Motorola, Microsoft was unwilling to enter into a licensing agreement," Motorola's statement said.
"Motorola's patent portfolio and licensing agreements are critical to our business, and we will continue to take all necessary steps to protect the Company's intellectual property for the benefit of all Motorola stockholders," the statement concluded.