Microsoft’s years of bullying smaller companies into patent submission is about to come back and bite them in the butt. Today in court Google demanded $4 billion a year in patent fees for the Xbox 360 or stop selling it in the United States. Microsoft sees this as a huge slap in the face, but this kind of stuff has been going on between Microsoft and smaller companies for years.
Google recently purchased Motorola Mobility for $12.5 billion in what a lot of analysts saw as a means for Google to go after Microsoft in retaliation for the shady business practices Microsoft has been guilty of for years. On April 24th, Microsoft was found to be at fault of violating 4 out of the 5 patent violations that was filed against them.
If Microsoft doesn’t settle, and Google ends up winning, here is what’s at stake:
-Billions of dollars in money paid from Microsoft to Motorola and eventually, Google.
-The ability for other companies, like Qualcomm to control fees for patents they license.
-The ability for Microsoft to import Xbox into the U.S. from factories in Asia.
-Perhaps, ultimately, the ability for Android device makers to use Android without having to pay Microsoft royalties or be sued by the software giant.
Look for them to settle, mostly because of the future impact this case can have on nearly every patent license going forward.
Bottom line of Motorola’s argument: Microsoft should have responded to 2.25% patent royalty demand by negotiating, not filing U.S. suit.