SEATTLE--Microsoft will square off with Google's Motorola Mobility tomorrow in a federal court here, arguing over how much the software giant should pay the wireless technology company to use its patents.
The case pits the two tech titans against one another in an arcane but significant battle over reasonable fees companies can charge for use of technology based on patents considered essential.
Motorola wants royalties that Microsoft says could reach $4 billion a year to use video streaming and Wi-Fi technology that it has baked into Windows and its Xbox video game console. Motorola holds patents that are part of the H.264 video and 802.11 wireless standards. Microsoft is willing to pay a royalty, but not at the 2.25 percent of the product price that Motorola has sought.
"We are grateful for the chance to present our case to the court on an important issue for consumers and industry," David Howard, Microsoft corporate vice president and deputy general counsel, said in a statement today.
Motorola didn't respond to a request to comment.
Beyond the specifics of the fight between Microsoft and Motorola, the case could have broader ramifications for patent law. The companies are arguing over fair, reasonable, and nondiscriminatory terms, known to patent lawyers as FRAND, that patent holders can charge for standard essential patents, which those lawyers refer to as SEPs. This case could help establish a framework for what patent holders can reasonably charge for use of their essential technology.
U.S. District Judge James Robart tried to get the the sides to settle earlier this year. Instead, both companies tried to dismiss the claims of the other to no avail, leading Robart to schedule the trial.
It begins at 9 a.m. PT tomorrow morning and is expected to run into the following week. A ruling is likely to come early next year. There will be plenty of expert testimony. The highest ranking Microsoft executive expected to testify is Jon DeVaan, a senior vice president for Windows Development.