New York: Google Inc will have to make do with the low rate it must offer Microsoft Corp to use some of its Motorola Mobility patents after a U.S. appeals court on Thursday ruled the licensing rate had been properly set.
The 9th U.S. Circuit Court of Appeals in San Francisco said a lower court judge properly determined the patents` value even though the royalty rate was only a fraction of what Motorola had asked for. Google sold the Motorola handset business to Lenovo last year but kept its patents.
The case has been broadly followed by the technology industry because it could affect how Google negotiates royalty rates with other companies. It could also set a new standard on what it means for patent owners to license technology considered standard in an industry to others on fair terms.
Microsoft sued Motorola in 2010, alleging Motorola had breached its obligation to offer licenses at a reasonable cost. After a 2012 trial, U.S. District Judge James Robart in Seattle said the appropriate royalty rate was $1.8 million, far less than Motorola`s demand for as much as $4 billion a year.
In a subsequent breach of contract trial in 2013, a jury awarded Microsoft about $14.5 million in damages for breach of contract. The appeals court upheld that verdict on Thursday.