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Xbox 360 Slim May Face US Sales Ban

Jonathan Lester
lawsuit, Motorola, Patents, Xbox 360
Xbox 360

Xbox 360 Slim May Face US Sales Ban

Microsoft Rejects Motorola Patent Settlement

A vicious ongoing legal dispute between Motorola and Microsoft may result in a ban on selling Xbox 360 Slim consoles in the US and Germany, after Microsoft refused a settlement offer that would compel them to concede royalties of 2.25% from every unit sold.

The case surrounds Motorola's patented ActiveSync technology, which is used to decode video content in Xbox 360 slim units, Windows 7, Windows Media Player and Windows 7 phones. Motorola recently extended Microsoft a settlement offer, asking for a 2.25% cut of each Xbox 360 slim sale and a $0.50 dividend from each copy of Windows 7, but Microsoft has thrown out the potential lifeline.

"While we welcome any good faith settlement effort, it's hard to apply that label to a demand that Microsoft pay royalties to Google far in excess of market rates, that refuses to license all the Microsoft patents infringed by Motorola, and that is promptly leaked to the press." - Horacio Gutierrez, Microsoft's deputy general counsel via Reuters

What makes this case distinct - and far more worrying - than all of the other ongoing patent protection battles currently being waged by technology companies is a recommendation that the International Trade Comission ban the import and sale of Xbox 360 Slim consoles in the US. In April, Judge David Shaw advised the ITC that it should use a cease and desist order to compel a nationwide ban on the 4GB and 250GB SKUs because, in his opinion, they infringe on four Motorola patents. The ITC will now be mulling over the recommendation - and will either soon enact it or rewrite certain clauses pending President Barack Obama's approval. He'll have 60 days to review the decision.

A German court ruling has already come down in Motorola's favour and deployed a temporary injunction against selling the console - though Microsoft have acquired a restraining order to delay enforcement until after the US case has been settled.

It's a confusing and somewhat startling state of affairs, but either way, it's clear that Microsoft will have to fight tooth and nail for a way out before having to resort to the Court Of Appeals. Considering Shaw's recommendation, they're almost certainly running out of wiggle room. [via CVG, Courthouse News Service and Reuters]

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