The Motorola / Xbox case is finally over… we won

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It was about a year ago that a judge in the US ruled that Motorola would be allowed to stop all imports of the Xbox 360 into America until a patent lawsuit was completed. Thankfully some logic prevailed and the imports weren’t stopped but the case has been rumbling on and has finally come to a close..

What made this case unique was that at no time was Microsoft saying that they weren’t using the Motorola technology; they just felt that Motorola was asking for too much in the form of royalties and wanted a judge to set a RAND for them, RAND apparently stands for Reasonable And Non Discriminatory royalty range.

The patents were for the ubiquitous 802.11 wifi ability and the H.264 video codec. Both of these technologies are industry standards and if Motorola was allowed to charge the full 2.25% of the product price then it would mean that Microsoft would have to fork over $4 Billion a year to cover the patent costs. Which would mean we’d be charged more for consoles and Windows software to ensure the Microsoft shareholders still got their pound of flesh.

However in the end the judge has ruled that Microsoft must pay 0.555 cents for each product that uses Motorolla’s H.264 video codec, capped at 16.389 per unit. How you get more than one product per unit is unknown to me but there you go. As for the wifi, Motorola will now get 3.471 cents per Xbox sold and 0.8 cents for every other Microsoft product that uses it.

in the end, this means Microsoft will be forced to pay $1.8 million per annum, which is a far cry from $4 Billion.

This of course means that we will be charged less at retail…right? That’s how it works right? What do you mean it just means the shareholders get more profit and we pay the same price… that’s not right.

Last Updated: April 29, 2013

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