Microsoft files mobile licensing suit against InterDigital

Microsoft Corp.is claiming InterDigital Inc. has been violating its pledge to offer fair and reasonable licenses on patents related to fundamental mobile-phone technology.

A U.S. trade judge in Washington said in April that Microsoft has been unwilling to license InterDigital patents on standardized technology.

The complaint was filed in a federal court in Wilmington, Delaware, and adds to the long-fought patent-licensing battle between the two tech giants.

Microsoft claims that InterDigital is “engaged in an unlawful scheme to acquire and exploit monopoly power over technology necessary for companies to make 3G and 4G cellular devices”, according to Reuters. The full commission is considering the judge’s findings and is scheduled to release its final decision on August 28. Companies often sue at the ITC to win an import ban and in federal court to win damages.

Additionally, Microsoft said InterDigital was using the threat of the US sales ban to twist Microsoft’s arm into settling for a higher price for the patents.

“Despite our efforts to resolve 3G patent licensing matters with Nokia, we have been unable to come to an agreement”, said William J. Merritt, President and CEO of InterDigital at the time.

Microsoft executives are definitely nervous at this point.

Microsoft’s claim hinges on the argument that since the patents involved cover technology essential to an industry standard, the royalties owed should be limited. This is a crucial time for Microsoft, since patent-licensing is a serious issue, and because its smartphone business could get significantly hurt if it loses the case.

Microsoft’s complaint appears to counter the proceedings brought by InterDigital before the US global Trade Commission (ITC), which may prohibit the importation into the United States of products produced in factories overseas if they violate its patents. In the same time period, the company lost its position as the third-largest handset manufacturer in the world.

Recently, Microsoft launched Windows 10, with which it aims to unify PC and mobile platforms. On the other hand, InterDigital does not create anything with those patents.

The judge also ruled that there was sufficient evidence to show the company tried to engage in ‘reverse patent holdup’.