Being the richest kid in school – or the one voted most likely to succeed – often increases the likelihood you will have enemies and/or critics. Microsoft (NASDAQ: MSFT) has found that out over the years, seeing the inside of a courtroom more often that the Washington State-based behemoth would care to.
The breezes investors heard and probably felt out the west coast late this week were probably sighs of relief issued by Microsoft executives and their lawyers, as a federal judge in Seattle ruled in the corporation’s favor, in two patent dispute involving its rival Google Inc. (NASDAQ: GOOG)’s Motorola Mobility unit.
On Thursday, in the first of two patent trials, U.S. District Judge James Robart in Seattle said Microsoft owed only a fraction of the royalties Motorola had claimed for use of its technology in Microsoft's Xbox console.
The outcome might otherwise have ushered in shell-out time for the corporation known as “Mr. Softie”: Motorola had sought as much as $4 billion U.S. a year for use of its so-called standard, essential wireless and video patents, while Microsoft argued its rival deserved about $1 million U.S. a year. Robart decided the appropriate payment was about $1.8 million.
It’s a disappointment for Google, which bought the Motorola unit for $12.5 billion U.S., partly for what media outlets call its intellectual property stockpile. The low valuation by the judge would make Motorola’s patents a weaker bargaining chip for Google in seeking licensing deals with other firms.
Nor is the end of the legal wrangles for the rival firms. The second patent trial, set for this summer and also in Seattle, will settle whether Motorola breached its duty to license its standard patents to Microsoft on fair terms.
The two firms have been locked in court battles for months over who owns the technology behind smartphones and other new electronic devices.
Apple Inc (NASDAQ: AAPL) and Microsoft have been litigating in courts around the world against Google and its partners such as Samsung Electronics, which use the Android operating system on their hardware.
And the battles haven’t been restricted to the courtrooms: Microsoft has gone after Google with scathing ads beginning earlier this month, a five-month marketing campaign that Microsoft Corp. derisively calls "Scroogled."
The ads, which have appeared online, on television and in print, show Google as a two-faced company more interested in increasing profits and power than protecting people's privacy and providing unbiased search results.
Most recently, Microsoft strafed Google verbally for sharing some of the personal information that it gathers about people who buy applications designed to run on smartphones and tablet computers powered by Google's Android software. Whether the ads truly change the public perception of either firm remains to be seen, but it shows an ugly side to this corporate battle.
On Friday, MSFT stock backtracked 15 cents to close at $31.79 U.S., just down from yesterday’s 52-week intraday high of $32.84, a far cry from the 52-week gulch of $26.26 U.S. in early December.
