Microsoft to Pay Motorola $1.8 Million per Year for Standard Essentials Patents – Instead of $4 Billion

April 26, 2013 - Written By Alexander Maxham

Apparently, US District Court Judge James Robart determined yesterday that Google’s Motorola unit was not entitled to the $4 billion per year it was asking for from Microsoft for their standards-essentials patents. Motorola was supposedly seeking royalties from Microsoft’s Xbox gaming system. Their gaming system utilizes the company’s technology concerning video decoding wireless connectivity. Instead of Motorola getting the $4 billion per year Google was after, the Judge decided Microsoft would pay Motorola about $1.8 million. That’s a huge difference there.

The deputy general counsel for Microsoft, David Howard, spoke with Bloomberg regarding the decision:

“This decision is good for consumers because it ensures patented technology committed to standards remains affordable for everyone,”

This ruling by Judge Robart is a serious blow to Google. Google has said all along that they purchased Motorola for their patent portfolio when they purchased the company in 2011 for about $12.5 billion. But now Google has a somewhat weaker bargaining chip when negotiating licensing deals with their competitors. Analysts have argued that Google has overpaid for Motorola, and given this ruling, I might have to agree with them.

Motorola and Microsoft will return to the courtroom in August to argue if Motorola failed to license Microsoft’s standard-essential patents at fair terms. We’ll have to see how that works out.

Google may have essentially bought Motorola for their patents, but now they are using them to build hardware. If not for the Nexus program, but as a model to other manufacturers that you can build great devices with stock Android. Motorola is already costing Google a ton of money each quarter, and this decision by Judge Robart didn’t help anything at all with Google and Motorola.

What do you think, did Google overpay for Motorola Mobility back in 2011, for the $12.5 billion? Or could Google have spent that chunk of change on something else? Let us know what you think in the comments below.