Today, Wednesday 8th April 2015, Microsoft will face off against Google in a San Francisco court. Alone, this means functionally nothing, large companies launch lawsuits against one another endlessly, often to little effect. However this case is a little different, and could likely have a lasting impact.
In the world of tech, R&D is essential, as both a defense against competitors and the future. Sometimes however, when developing products, industry-standards must be used, such as 3G, to ensure mutual compatibility with other technologies. In these situations, those who developed the standards take a cut, and it is the size of what this cut should be that Microsoft and Google are fighting over.
It all started back in 2011. Microsoft was sued by Motorola, who attempted to halt Xbox sales in the US, claiming patent infringement on Redmond’s part. Of course, this was challenged by Microsoft, which alleged that Motorola was making unfair demands regarding the use of open standards to which it had contributed, namely the H.264 video and 802.11 Wi-Fi standards, asking for fees far in excess of what were commonly asked.
Having existed for a long time, Motorola had contributed to a large number of industry standards, giving it a very valuable patent portfolio. Knowing this, and seeking to bolster its own position in the patent game, Google bought the firm in 2011. Since then, Mountain View has gutted Motorola and sold it to Lenovo, sans patents. It is now Google which has opted to continue the fight, seeking to twist the knife in Redmond’s side.
Today’s case concerns a ruling which was made in Microsoft’s favor in 2013, which nominally should have ended the case. Motorola’s demand for $4 billion per year in return for use of its patents was considered ridiculous, summarily being thrown out, with a more reasonable sum of $1.8 million per annum being agreed upon. Google now argues that this case should have been dealt with differently, by a different court, and has challenged the earlier ruling, which Microsoft seeks to have upheld.
What the outcome of this case will be is difficult to tell. The likes of T-Mobile and Apple, companies that rely on the use of industry-standards to deliver their services and products, have come out in favor of Microsoft. Equally, firms that heavily depend on the royalty payments delivered from the use of open standards, such as Nokia and Qualcomm, are leaning towards Google.
If Mountain View manages to mount a successful challenge to Microsoft, then it may well become the case that developing handsets becomes a far costlier and more difficult process for a number of manufacturers across the US. On the other side, if Redmond wins, then companies that depend on royalty payments for the bulk of their income will likely find it increasingly difficult to protect their place in the industry.
As cooperation is becoming ever more essential to progressing in the world of technology, this case will have an interesting outcome, and will likely set a lasting precedent. Both firms have invested a significant amount in their success, with top patent lawyers hired on both sides.
As such, legal fireworks will continue to fly for some time yet. A verdict is expected to be reached in several months.
Do you believe Motorola was right in its claim? Let us know in the comments below.