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Motorola wanted $4 billion for H.264 patents

By PETER WHITE

Published: 7 April, 2012

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Microsoft is letting it be known that it was asked for $4 billion as a license fee to some of the essential patents held by Motorola, in the H.264 codec license and this is being used as a club to beat Motorola with.

The accusation is that these charges are supposed to be controlled by the FRAND provisions, (fair, reasonable and non-discriminatory) insisted upon by standards organizations when they allow a technology into a standard.

The European Commission has now followed through on threats to investigate Motorola Mobility over its licensing of standards-essential patents and not just those that were used against Apple in the core cellular patents - it is now extending this to the Microsoft accusation too.

Microsoft tries to say that $4 billion is a lot of money when compared to its Xbox revenue, and points out that the entire revenue of the division Xbox sits in is little more than twice this.

But you have to remember a number of things here. First off this was an opening gambit, which Microsoft chose to ignore; secondly it is for all of Microsoft products, and it is not an annual fee, but a long term license, and it is not just Xbox which carries video, and thirdly and most importantly Microsoft tried to hijack H.264 with its own VC1 codec, which has many of the same patents in it.

In other words it tried to ship all the patents in H.264, and give them away with every browser it shipped for free, and companies like Motorola (and about 14 others) are still fairly upset about this.

Chance are that this suit is not predictable, and that the Apple situation and the Microsoft situation are both very different, and involve very different histories. So do not expect a speedy resolution.

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