Microsoft's clear-cut patent victory over Google-owned Motorola Mobility raises the question: Has Google, which claims to stand for openness as much as possible, become a patent troll?
A jury yesterday ruled that Motorola Mobility didn't comply with fair and reasonable licensing terms when it negotiated with Microsoft over use of the H.264 video compression standard and 802.11 wireless networking standards. In addition to ruling in Microsoft's favor, the court awarded Microsoft approximately $15 million in damages, about half of what Microsoft was looking for.
The ruling was the second victory for Microsoft arising from the same suit. In November 2010, Microsoft filed a suit against Motorola claiming that it violated its agreements to provide, at reasonable rates, use of Motorola's patented technologies which have become industry standards for online-video viewing and wireless usage. Motorola had demanded that Microsoft pay 2.25 percent of the price for each Xbox and Windows license sold. That would have added up to a whopping $4 billion annually. Microsoft cried foul, went to court, and in April a judge ruled in Microsoft's favor, saying it only needed to pay approximately $1.8 million annually to Microsoft, not much more than the $1.2 million that Microsoft thought it should pay.
Both rulings arise from the "fair, reasonable and nondiscriminatory" terms, FRAND, for short, that private companies who own industry-standard patents agree to follow in order to join international-standards groups. In both parts of the case, Microsoft argued that Motorola violated those FRAND terms. The Seattle Times puts Microsoft's argument succinctly:
Microsoft had argued that the rate Motorola proposed for licensing its patents was so outrageously high that it was done precisely so Microsoft would say no. That would give Motorola an excuse to file for injunctions against the import of Xbox and Windows products.
The courts, in two rulings, agrees with Microsoft.
David Howard, Microsoft deputy general counsel hit Google hard over the patents in a statement, saying:
"This is a landmark win for all who want products that are affordable and work well together. The jury's verdict is the latest in a growing list of decisions by regulators and courts telling Google to stop abusing patents."
Back in May, the International Trade Commission also weighed in on the issue, ruling that Microsoft's XBox 360 didn't infringe on any Motorola patents. That makes three strikes against Google-owned Motorola in this patent battle.
John Paczkowski of AllThingsD says that the results essentially label Google as a patent troll:
"Not only does the verdict call into question the wisdom of the company’s $12.5 billion acquisition of Motorola Mobility, it has made it possible for a rival like Microsoft to publicly lambaste it as a patent troll. Accurately."
In this instance, I think he's just about on target. If Google really wants to stand for openness, it's going to have to change the way it uses its patents as a tools against competitors.