Google vs Microsoft: Stiff Battle for Fixing Royalty for Motorola’s Patented Wireless Technologies

As we see the sales of smartphones and tablets sky rocketing to an all time high, the number of cases of patent infringement and litigation are also on the rise between the giants.

Apple, Google and Microsoft are indulged in heavy fighting in courts over the licensing of various underlying technologies used in their products. A case is underway in US court between Google and Microsoft regarding latter’s use of patented wireless technology from Motorola. It may be recalled that Motorola’s Mobility division is now owned by Google.

As per the case filed by Motorola, they are seeking $4 billion royalty per year from Microsoft for using their patented technology in the manufacturing of Xbox consoles and Surface tablets. Microsoft on the other hand has put an argument against it saying that only $1 million can be paid annually to Motorola for using its patents. A Google executive representing Motorola Mobility unit testified at the court defended their demand for $4 billion saying that Microsoft is going to make around $94 billion as revenue from Xbox and Surface till 2017.

This case is significant in the context of Google bargaining power with its rivals who are using Motorola Mobility’s patented technologies. If US court decides to favor Microsoft, it is definitely going to weaken the position of Google and it could even throw doubts on the high price Google paid for buying out Motorola’s mobility business unit. Google shelved out $12.5 billion for getting Motorola Mobility and experts believe that Motorola’s rich library of communication patents was one key driver for this valuation.

The court had decided to keep the hearing private and did not favor publicizing the information on patents and licensing deals between the entities. It would be interesting to see which way the court goes! Whatever may be the verdict, it is Google who will be deeply glued to the proceeding and hoping for the verdict to go their way the most. Stakes are quite high!