What Does the Microsoft-Motorola Mobility Patent Case Mean for BlackBerry?

Microsoft and Google’s Motorola Mobility division will square off in court today in a legal battle over standards-essential patents and their royalty rates. There’s a lot at stake in the case — not just for Microsoft and Google, but for the broader industry and a few other key players, pne in particular: BlackBerry.

At issue in the case is Microsoft’s allegation that Google/Motorola Mobility refused to license some of its standards-essential patents on FRAND (fair, reasonable and nondiscriminatory) terms in breach of its obligation to do so. Earlier this year, a federal court in Seattle ruled that Motorola — which had been demanding in excess of $4 billion from Microsoft for its use of a portfolio of patents related to the the H.264 video standard and the 802.11 wireless standard — ruled that it was instead entitled to just $1.8 million a year.

Now a jury will determine whether Google and its Motorola Mobility division violated their FRAND obligations by seeking unreasonable royalties from Microsoft and threatening to seek an injunction if they weren’t paid. And if it should find against them, determining that Google and Motorola did indeed breach their contract, it could order them to pay Microsoft damages. Obviously, that would be good news for Microsoft, were it to happen. But it’s also potentially good news for BlackBerry, or any other company that signed an SEP licensing deal with Google/Motorola Mobility under duress and threat of litigation.

In 2008, Motorola sued BlackBerry, then Research in Motion, alleging it violated seven of Motorola’s patents. BlackBerry countersued, claiming infringement of nine patents and, crucially, that Motorola was wrongfully demanding excessive royalties for its standard essential patents.
“[Motorola] has refused to extend FRAND … licensing terms to RIM for any of Motorola’s purportedly essential patents … and has instead demanded of RIM terms that are unfair, unreasonable, and, on information and belief, discriminatory,” BlackBerry said in its complaint.

Motorola disputed that assertion in court, filing a motion to have BlackBerry’s claims that it was abusing its SEPs dismissed. But the presiding judge denied it. “At this stage of the case, the court takes [BlackBerry’s] pleadings as true,” Senior U.S. District Judge A. Joe Fish wrote. [BlackBerry’s] has adequately pled that Motorola did not honor its promise to license on FRAND terms. Motorola’s contention otherwise is entitled to no weight.”

A small victory for BlackBerry, but one that would ultimately get it nowhere. Motorola subsequently filed a complaint with the U.S. International Trade Commission alleging patent infringement and seeking a ban on imports of BlackBerry phones into the U.S. And a few months later the two companies settled the case. with BlackBerry agreeing to make a one-time payment to Motorola and pay ongoing royalties for its IP.

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