When Google bought Motorola Mobility for $12 billion two years ago, part of the deal’s appeal was Motorola’s patent portfolio, which Google hoped to use to fight back against Microsoft lawsuits. On Wednesday, the deal looks worse than ever after a Seattle jury instructed Motorola to pay the software giant $14.5 million for abusing those patents — in particular, by refusing to license so-called FRAND patents, which are deemed standards-essential and must be licensed on reasonable terms.
The ruling is unusual for a patent case because it doesn’t concern patent infringement, but instead is a breach of contract punishment aimed at Motorola. Microsoft had argued that its rivals’ refusal to license the patents on reasonable terms, as it was obliged to do, had forced it to move a production factory in Germany.
Microsoft had reportedly asked for $23 million in damages plus $6 million in attorneys. The jury’s $14.5 million verdict, which came sooner than expected, was reported by multiple veteran legal reporters on Twitter who are familiar with the case. Microsoft was quick to tout the verdict with a triumphant press release.
“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,” a senior Microsoft lawyer said in a statement.
A Motorola spokesman countered with: “We’re disappointed in this outcome, but look forward to an appeal of the novel legal issues raised in this case. In the meantime, we’ll focus on building great products that people love.”
It’s likely Motorola and Google will appeal the verdict, especially as a judge may be less sympathetic than a jury from Microsoft’s hometown.
The verdict is also yet another landmark in the interminable patent fights over smartphone software. The case was of interest to legal scholars who have been unsure about what penalties are appropriate when a company breaches FRAND patent commitments.