Microsoft Did Not Violate Google Patent: ITC Judge

Microsoft Corp did not violate a patent owned by Google subsidiary Motorola Mobility when it made its popular Xbox, an administrative law judge at the International Trade Commission said in a preliminary decision issued on Friday.

A final ITC decision in the case is due in July.

The fight over the Xbox video game console is related to the larger smartphone patent war between Apple, Microsoft and the mobile phone makers who use Google’s Android software, including its subsidiary Motorola Mobility.

Motorola Mobility accused Microsoft of infringing five patents when it filed its complaint in 2010. Four have been dropped.

One patent remains, according to the ITC docket for the case. That patent allows devices to communicate wirelessly over short distances.

If the ITC finds that a company infringes upon a patent, the infringing product can be barred from importation into the United States.

“We are pleased with the administrative law judge’s finding that Microsoft did not violate Motorola’s patent and are confident that this determination will be affirmed by the commission,” said David Howard, corporate vice president and deputy general counsel, Microsoft, in an emailed statement.

Google said it was disappointed.

“We are disappointed with today’s determination and look forward to the full commission’s review,” said spokesman Matt Kallman in an emailed statement.

Tech companies have spent billions of dollars to buy patent portfolios that they can use defensively or offensively, and still more money litigating the cases around the world.

The long-running Xbox case has seen many twists and turns since it was filed in late 2010.

In April 2012, ITC Judge David Shaw said in a preliminary decision that Microsoft infringed four patents and did not infringe on a fifth.

But instead of deciding the case, as is usual, in June 2012, the trade panel sent the case back to the judge for reconsideration.

In January, following an antitrust settlement with federal regulators, Google asked a trade panel to drop two patents from the complaint because they were essential to a standard. These types of patents ensure interoperability and get special treatment.

Google had promised the Federal Trade Commission that it would no longer request sales bans based on the infringement of standard essential patents because they are supposed to be broadly licensed on fair and reasonable terms.

The FTC, U.S. Department of Justice and U.S. Patent and Trademark Office argue that companies should not request sales bans when filing infringement lawsuits based on patents that are essential to a standard in most cases. Standard essential patents ensure that devices are interoperable.

The ITC is a popular venue for patent lawsuits because it can bar the importation of infringing products and because it issues decisions relatively quickly.

Motorola Mobility filed related lawsuits against Microsoft in federal courts in Wisconsin and Washington. They are both stayed pending an ITC decision.

The case is at the International Trade Commission, No. 337-752.

Facebook pays Microsoft $550 million for AOL patents

Facebook will pay Microsoft Corp $550 million in cash for hundreds of patents recently sold by AOL, the social networking company’s latest move to bulk up its intellectual property in the wake of a lawsuit filed by Yahoo.

A variety of logos hover above the Microsoft booth on the opening day of the Consumer Electronics Show in Las Vegas

The deal, shortly before Facebook is expected to have the largest initial public offering in Silicon Valley history, will give the social network 650 patents and patent applications, as well as a license to another 275 patents and applications owned by Microsoft.

Microsoft trumped Amazon, eBay and other tech giants earlier this month with its more than $1 billion purchase of most of AOL Inc. patent trove.

Valuing patents is a complex process, and it was not immediately clear whether Microsoft profited from the deal with Facebook.

Brad Smith, Microsoft’s General Counsel, said in a prepared statement on Monday that the Facebook deal allows it “to recoup over half of our costs while achieving our goals from the AOL auction.”

Facebook was also a participant in the AOL auction, a source told Reuters at the time.

Facebook’s deal with Microsoft comes as the world’s No.1 social networking company is preparing for an initial public offering that could value it at up to $100 billion and as Facebook fights a legal battle with Yahoo Inc.

Yahoo sued Facebook earlier this year, alleging that Facebook infringed 10 Yahoo patents, including several that cover online advertising technology. Facebook countersued Yahoo in April, alleging that Yahoo infringes 10 of Facebook’s patents.

In March, Facebook acquired 750 patents from International Business Machines Corp.

Microsoft invested $240 million in Facebook in 2007 and the two companies have forged various business collaborations over the years. Facebook features search results from Microsoft’s Bing search engine in its social networking service as well as video chat technology provided by Skype, which Microsoft acquired last year.

Netflix Chief Executive Reed Hastings serves on the board of directors of both Facebook and Microsoft.

REUTERS