Microsoft to Motorola: The way to 'patent peace'

The ongoing Microsoft-Motorola patent saga continues to play out, but now Microsoft has published its concept for "patent peace" between the two companies.

In a blog post yesterday, Microsoft general counsel Brad Smith and deputy general counsel Horacio Gutierrez said that Motorola Mobility parent Google "mounted a public relations and lobbying campaign deflecting attention from its refusal to honor its promise to standards bodies to license standards-essential patents on fair, reasonable and non-discriminatory (FRAND) terms." That refusal, the lawyers said, had led authorities in the U.S and the EU to investigate Google's conduct.

In order to come to an agreement, a "lasting solution of these disputes will not be reached by leaking settlement positions through the press," Microsoft's two top lawyers said, adding that "patent peace will be found through good faith engagement." They stated:

Microsoft has always been, and remains open to, a settlement of our patent litigation with Motorola. As we have said before, we are seeking solely the same level of reasonable compensation for our patented intellectual property that numerous other Android distributors -- both large and small -- have already agreed to recognize in our negotiations with them. And we stand ready to pay reasonable compensation for Motorola's patented intellectual property as well.

The patent wrangles have a complicated history: earlier this year more than a dozen Android-powered Motorola devices were banned from being imported to the U.S. for sale because Motorola was found to have infringed Microsoft's ActiveSync patent, thanks to a ruling by the U.S. International Trade Commission (ITC).

More recently, a German court banned the sale of all Motorola devices running Android because the smartphone maker infringed a Microsoft-owned patent relating to file storage.

Meanwhile Motorola secured an injunction against Windows 7 and the Xbox in Germany over H.264 video codecs, though the sales ban will not be enforced immediately. Microsoft said it wanted to use the video compression technology, but Motorola would charge in the region of $4 billion in annual royalties -- which Microsoft said was not at the market rate.

In the new blog post, Smith and Gutierrez went on to detail the two principles to resolve its patent disputes, which continues to eat up both companies' time, money and energy. The first principle is that any agreement "must be comprehensive." The second relates to H.264 video codecs, one of the most popular codecs available, in which the license fees "must be based on market rates."

The lawyers also warned Google that litigation now "stands at a crossroads." They stated:

With its phones and tablets now subject to injunctions in the U.S. and Germany, Google can no longer doubt the relevance of Microsoft's patent portfolio to Motorola's products. Google can take one of two paths: it can choose either to engage in serious discussions to search for patent peace or persevere in its diversionary tactics. We hope it will choose the first course, and we stand ready to engage in good faith if it does.

A Motorola representative told CNET in an e-mailed statement:

Microsoft wants to undercut Motorola's industry-leading patent portfolio, licensed by more than 50 other companies on fair and reasonable terms, while seeking inflated royalties tied to standards that Microsoft alone controls. Motorola is always open to negotiations that avoid wasteful and abusive patent claims.

Update, 2:30 p.m. PT: Adds statement from Motorola.