The smackdown is about to be laid on Microsoft by the International Trade Commission after a Seattle judge has ruled in favor of Motorola Mobility in a huge patent lawsuit that was originally filed in 2010. Microsoft was handed a brutal blow when the International Trade Commission (ITC) was advised on Tuesday to ban the import and sale of Xbox systems in the United States.

Judge David Shaw said Microsoft should be handed a cease-and-desist order on sales of Xbox 360 Slim consoles across the country. He also believes Microsoft should not only cease Xbox imports from China, as well as ban general sale of the console across the country, but also pay Motorola Mobility 7 per cent of the value of any unsold systems remaining in stores. We reported earlier that Google was demanding $4 billion a year to make this patent lawsuit go away, but this decision is way worse for Microsoft.

Microsoft has warned the ITC that banning Xbox 360 across the US would not serve the public interest, because it would leave the market with a choice between PlayStation 3 and Nintendo’s Wii. Shaw rejected the argument, claiming that enforcing intellectual property rights takes precedence. Plus, it’s not as if the lack of Xbox 360’s means people go hungry or the world implodes. No matter how important the 360 thinks they are. Also, there is plenty of competition, so, with the addition of the WiiU this holiday season, there is a chance this could actually happen.

The ITC commissioners can either allow the initial determination stand, or amend certain terms, or send it back for a rewrite. If Shaw’s recommendation is enacted, President Barack Obama will have 60 days to review the decision. Microsoft is a huge contributor, giving $852,167 to the Obama campaign in 2008, so it isn’t exactly clear to how the administration will lean, or if he doesn’t enact it, what happens.

If this actually happens, look for the major companies in the world to slow their gadget/tech releases because they can no longer blatantly break patent laws and just “deal with it later.”

picture courtesy of metalsupplychick