Microsoft Gains Upper Hand in XBOX Licensing Fight

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Last week, Microsoft prevailed in a patent licensing fee dispute with Motorola Mobility over technology used in Microsoft's XBox gaming consoles. Motorola Mobility initially sought $4 Billion from Microsoft as a licensing fee for incorporating technology covered by "standard-essential" patents owned by Motorola Mobility.

A "standard-essential" patent is one which covers technology used in international standards (such as the 802.11 WiFi standard and H.264 video-encoding standard) which ensures that various products are capable of working together. Licensing fees for "standard-essential" patents are often at the core of patent disputes between various technology companies like Microsoft and Google.

The Court ultimately ruled that Microsoft must pay approximately $1.8 Million per year, which amounts to a nominal per-unit licensing fee. The decision is good news for consumers who oftentimes bear the costs of patent licensing disputes through increased sales prices. The low per-unit fee is a promising sign that technology covered by "standard-essential" patents will remain affordable with minimal price increases.