Microsoft has won a second ruling against Google's Motorola Mobility, with a federal jury awarding the software giant $14.5 million in damages. As Microsoft charged, Motorola demanded unfair royalty payments for its so-called standard essential patents.
"This is a landmark win for all who want products that are affordable and work well together," Microsoft Deputy General Counsel David Howard said in a statement. "The jury's verdict is the latest in a growing list of decisions by regulators and courts telling Google to stop abusing patents."
This is the second time Microsoft has defeated Motorola in court for Motorola's abuse of patents. And the fact that a jury took just 3 hours to reach its decision should be a wake-up call to Motorola's overlords at Google.
Indeed, Google's $13 billion acquisition of Motorola Mobility last year is increasingly looking like the worst technology purchase of the past decade, with the latter firm's patent portfolio withering under repeated legal challenges. Google purchased the firm solely for this patent portfolio, and it also received a failing smartphone business as a bonus.
(Put in perspective, Microsoft's supposedly controversial planned $7.2 billion purchase of Nokia is nearly half as expensive, and in return the firm will own and/or gain access to the biggest and most lucrative mobile patent portfolio on the planet.)
At the center of this case are patents that Microsoft says Google/Motorola should license under reasonable terms. Google, however, had threatened to halt sales of infringing products—including Windows and Xbox—if Microsoft didn't pay exorbitant licensing fees that would have amounted to over $4 billion per year. The courts have now sided with Microsoft, and in a ruling earlier this year, a federal judge ruled that the correct licensing fees would have amounted to about $1.2 million to $1.8 million per year.
This week's decision regarded whether Google/Motorola acted in good faith and dealt fairly with Microsoft during licensing negotiations. The verdict is a resounding no.
Microsoft attorney Art Harrigan told the story of how Motorola defended its attempt to extort huge licensing sums from Microsoft by explaining that its initial offer was "just a piece of paper." Fair enough, Harrigan agreed, but "so is a ransom note."
Courtroom quips aside, it wasn't a slam dunk for Microsoft, which had asked for damages double that awarded by the jury. And Google, of course, promises to appeal. I assume that will also involve a piece of paper.