Google's Motorola was dealt a setback this week in its bid to land major royalty payments from Microsoft for sales of Windows and the Xbox. Judge fell in favor of Microsoft in the first round of an ongoing spat against Motorola over how much Microsoft should pay for using technology patented by Motorola in its products - and it was a lot less than the 12.5 billions <-- what Google has paid for Motorola Mobility [2.25 percent per product / almost 4 billion per year] Motorola wanted. The U.S. District Judge James Robart rules that 0.555 cents should be paid for products that use advanced video coding patents (like Windows and Xbox), and 3.471 cents for those that use a wireless patent (like the Xbox) <-- an annual payment of slightly less than 1.8 million. Microsoft is definitely happy because it is paying significantly less than what Motorola asks for, saying "[t]his decision is good for consumers because it ensures patented technology committed to standards remains affordable for everyone," while this ruling has severely injured Google. As a blogpost at Foss Patent has pointed out, "[a]t this level, it would take approximately 6,950 years -- almost seven millennia -- before Google's SEP royalty income from Microsoft would have paid for the overpriced, wasteful purchase of Motorola Mobility. Seven millennia." However, even if both companies are able to stick around for this long, this would never happen – these patents will expire in a matter of years.
However, this is still not the end of the story. Stemming from the same case back in 2010, an August trial will be set off to be faced by the two sides, which will eventually determine whether Motorola has offered patent licenses on fair terms.
This just makes me wonder if Google really should just"give up on litigation and focus on licensing based on a realistic assessment of what its own patents are worth" (Foss Patents). The decision would be hard, obviously, given the time and capital it has already invested, but sunk costs are sunk costs.
Exactly, decisions shouldn't be based on costs to that point -- sunk costs. Google should evaluate what they can get out of this going forward, and if the benefits don't exceed the costs, they should stop now.
ReplyDeleteWow, another bad news for Google! It's difficult to think that Google's purchase of Motorola Mobility was a complete waste, but I have definitely not heard of any gains because of that...But going back to this topic, I also think it may be better for Google to move forward with this lawsuit.
ReplyDeleteInteresting read. Google just keeps losing... I agree with Aaron, it is basically a cost-benefit analysis at this point. If they don't get more out of what they are dealing with than they should just stop whatever they are doing..
ReplyDeleteI don't think Google will give up on litigation and focus on licensing. I guess Google will find a way to fight back its rival, maybe buy more patents from other companies?
ReplyDeleteI think the point is Google is trying to make the best use of the patents acquire from the purchase of Motorola Mobility. As long as their patent office agree that they have a chance to win in litigation, Google will go for it.
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