Microsoft is facing a ban on the Xbox 360 after a court ruled in Motorola's favour in a legal dispute. A patent scrap spanning the globe has brought Microsoft's use of Wi-Fi and H.264 video in the Xbox under scrutiny.
Although it's not the final ruling, a judge at the US International Trade Commission (ITC) decided that Microsoft's hugely popular games console infringes four patents owned by Motorola Mobility.
The patents relate to Wi-Fi and the H.264 video format. Patents are like copyright for inventions, and when you own one, other companies must pay you to enjoy the privilege of using that particular technology.
Patents are the weapons of choice in open legal warfare between assorted tech giants at the moment.
At issue here are 'FRAND' patents: patents for the technology essential to making sure your gadget meets industry standards. Such standard essential patents must be offered on fair, reasonable, and non-discriminatory terms -- hence FRAND.
In this case, Motorola owns patents for some aspects of the technology required to make Wi-Fi and H.264-format video work. As they're standards used across the industry, Motorola must make the tech available at a cost that's considered fair to anyone wanting to build in Wi-Fi and H.264 video to their gadgets.
Microsoft reckons that Motorola's pricing to license these technologies is neither fair nor reasonable, and could cost the company up to £2.5bn a year to keep Wi-Fi and H.264 video in the Xbox.
Several cases in different countries are examining this same situation. The European Commission is investigating Motorola's enforcement of some of the technologies involved, and next week a German court will rule on whether Motorola can ban Windows 7, Windows Media Player and the Xbox. Microsoft takes the possibility of a ban so seriously it's moved its European software distribution centre out of Germany completely.
Meanwhile back in the US, the full ITC comes together in August to make a final decision. Until then, to cheer up any Xbox fans, here are our favourite