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Microsoft waves Frand at Motorola

Asks court to set 'fair' patent rates

Internet Security Threat Report 2014

Microsoft has filed suit against Motorola, not for patent infringement but for refusing to license patents on "fair, reasonable and non-discriminatory" (Frand) terms like it promised.

Microsoft is suing Motorola, claiming that the licensing terms Motorola is demanding exist "for the purpose of extracting unreasonable royalties from Microsoft", and is asking the US court to say how much Redmond should be paying for licences on Wi-Fi and H.264 patents owned by Motorola.

Patent rates are more usually a private matter, to be decided between companies, but Motorola is under an obligation to to license the patents on Frand terms, a condition often imposed by standards bodies before the technologies can be incorporated into their standards.

Microsoft alleges that Motorola isn't playing fair:

Instead [of living up to its Frand commitments], Motorola is demanding royalty payments that are wholly disproportionate to the royalty rate that its patents should command under any reasonable calculus.

So Redmond is now asking the court for "a judicial declaration that Motorola has breached [its Frand] obligations by demanding excessive and discriminatory royalties from Microsoft" as well as a "judicial accounting of what constitutes a royalty rate in all respects consistent with Motorola’s promises".

The same claim has been made by Apple, of Nokia, as Florian Mueller points out when looking at the context of the claim. Frand agreements don't apply to all technical standards: the W3C, for example, requires that internet standards be unencumbered by patent licences. But lots of important standards are protected only by Frand agreements, so the ability of such agreements to stand up in court is critical – and these cases could have far-reaching implications. ®

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