Policy & Law
Motorola wanted to ban the Xbox 360, among other things. The International Trade Commission agreed that Microsoft's products infringed. Microsoft claimed that Motorola wanted too much money to license the so-called standards-essential patents, and attempted to fight the ban. Now, two weeks after a trial kicked off in Seattle, common sense appears to have prevailed. US District Court Judge Robart has agreed to dismiss Motorola's attempts for injunctive relief based on its fair, reasonable and non-discriminatory (FRAND) patents, effectively saying that Motorola will have to pursue money (in the form of royalties) rather than attempt to ban products.
"Because Motorola cannot show irreparable harm or that monetary damages would be inadequate, the court agrees with Microsoft that injunctive relief is improper in this matter and grants Microsoft’s motion."
In the court order (which you can find in PDF form below), Judge Robart explains that a ban doesn't make sense partially because of the specifics of this case, writing that "litigation in this matter has progressed to the point that it is now clear that a license agreement will result for all of Motorola’s H.264 standard essential patents." If Microsoft and Motorola intend to get along after this and agree on a royalty rate, there's no point in costly measures that would keep products off shelves. We're curious to see whether Germany will agree on that count.
But more generally, the order suggests that the court may not be friendly to attempts to use FRAND patents to ban products at all. The entire idea behind FRAND is that companies which participate agree to license standards-essential patents to other companies at a fair rate to spur their wide adoption, and many (including FTC chairman Jon Leibowitz) are concerned that if companies simply turn around and sue using those patents, such standards won't take off. Here, Judge Robart decided that "because Motorola cannot show irreparable harm or that monetary damages would be inadequate, the court agrees with Microsoft that injunctive relief is improper."
Since the heart of a FRAND patent argument is over licensing fees, though, there might not be such a thing as a FRAND case where money wouldn't be enough to settle such an argument. It's hard to say if other courts will agree with Robart's decision in future rulings, but as we've seen in recent months, the idea that FRAND patents shouldn't be used to ban products seems to have some momentum.
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