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Microsoft's Xbox Infringes Motorola Mobility Patents: ITC Rules

Microsoft Corp. (MSFT) infringed patents held by Motorola Mobility Holdings Inc. (MMI) in making its popular Xbox gaming consoles, the U.S. International Trade Commission issued a preliminary ruling on Monday.

The patents in the issue relates to technology like wireless connections for the Xbox to the Internet and video compression to speed transmission.

ITC Judge judge David Shaw ruled in favor of Motorola that Microsoft infringed four patents that deal with video-display technology. But, he found that Microsoft did not infringe on a fifth in the complaint concerning Wi-Fi connectivity.

Microsoft will get the opportunity to respond in early May. It is expected that the full commission will review the judge's decision and issue a final ruling in August.

Motorola, which is being acquired by Google Inc. (GOOG), reportedly said that it was pleased by the initial determination and that it remains confident in its position as the case moves toward a final ruling, while Microsoft stated that the finding is a first step in the process.

The latest case is one of the several pending between both companies.

It was in October 2010 that Microsoft first filed suit against Motorola in federal court in Washington state. Microsoft claims that these patents are part of a group of technologies the companies agreed to share and that Motorola has sought unreasonable and discriminatory royalties for its technology.

Meanwhile, Motorola countersued on the same patents and some additional patents, alleging that Microsoft's use of those patents violates standard use covered by sharing agreements. Both companies also have filed suit in Germany over some of the same patents.

In early April, the European Commission, following complaints from Apple Inc. (AAPL) and Microsoft, initiated two formal antitrust investigations against Motorola inquiring whether the company used some of its standard essential patents to distort competition in the internal market violating EU antitrust rules.

Microsoft shares closed Monday's trading at $32.12, down $0.30 or 0.93 percent. In the after-hours trading, shares lost $0.06 percent to $32.10.

Motorola shares settled at $38.43, down $0.40 or 1.03 percent.

by RTT Staff Writer

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