google motorola

Google may have become the first convicted patent troll, after a federal jury Thursday fined the internet giant $14.5 million related to licenses held by Motorola. The Seattle-based jury upheld Microsoft’s claim that the Google-owned Motorola demand $4 billion to license Wi-Fi and video patents that were supposed to be available under fair and reasonable terms.

The finding comes just a week before Apple’s appeal of a similar claim against Motorola is to be heard. This week’s judgement against Motorola opens a legal can of worms for both Google and Motorola, according to one keen patent observer…

FOSS Patents’ Florian Müeller has the scoop:

A federal grand jury yesterday rendered a verdict that makes Google (Motorola) a convicted patent troll. It has been found to have breached the duty of good faith and fair dealing flowing from Motorola’s FRAND licensing pledges to standard-setting organizations.

Up until then, no so-called patent troll has been convicted of such conduct.

Müeller explains further:

The verdict is a clear signal to other standard-essential patent (SEP) holders: there’s potential liability if you renege on your promises, and damages could be much greater in cases in which someone does obtain and enforce injunctive relief, or in which an implementer, at point blank, bows to threats.

In other words, while $14.5 million is an insignificant sum for Google, if a court blocks imports or sale of a product based on exorbitant FRAND licensing, the cost could be much, much more.

In Microsoft’s case, the software giant compared Motorola asking $4 billion to license a standard-essential patent to paying $54 million for a Ford Taurus. In a similar vein, Apple alleges Motorola asked 12 times the normal price for licensing the SEP patents.

Motorola logo (full size)

According to Mueller, Motorola was more interested in a ‘zero-zero’ agreement, where Microsoft wouldn’t have to pay $4 billion for the FRAND-licensed patents if Microsoft gave Motorola free and unfettered access to non-FRAND patents.

In other words, the “reasonable” part of FRAND licensing went out the window.

The ruling opens the gate for other companies that have undergone similar high-pressure negotiations with Motorola (such as BlackBerry) to file similar lawsuits against the Google-owned company. In fact, Mueller suggests Motorola should drop or settle patent lawsuits already in the works.

Google and Microsoft will meet twice in Germany next week, as well as Apple’s appeal. Motorola’s loss will likely be a central focus in all three lawsuits. If those lawsuits aren’t enough for Google to change its way, the FTC could drop the antitrust hammer, reversing its approval of the search giant’s acquisition of Motorola.

All in all, next week should provide some fireworks.