In a 29 page Order On Motions For Judgment As A Matter Of Law dated September 24, 2013, Judge James L. Robart in Case No. C10-1823JLR (W.D. Wash.) denied Motorola’s JMOL Motions to overturn the Jury Verdict that Motorola breached its FRAND commitment to IEEE and ITU by offering to license certain of its declared SEPs to Microsoft at an unreasonable royalty rate. Microsoft filed the breach of contract action against Motorola based on Motorola’s two initial offer letters, each of which “offered a royalty rate of 2.25%” of the price of the end product (e.g., each Xbox 360, PC/laptop, smartphone, etc. . .) compliant with the 802.11 or H.264 Standards. At trial, Microsoft contended Motorola breached its FRAND obligations by, inter alia, offering its 802.11 and H.264 patents at a royalty rate that was not FRAND. In denying Motorola’s JMOL Motions, the District Court found, inter alia, that Microsoft presented a “substantial amount of evidence” Motorola breached its duty of good faith and fair dealing in carrying out its contractual commitments to IEEE and ITU, including that “Motorola’s actions did not conform with industry custom and practice” and frustrated the purpose of the IEEE and ITU contracts through “hold up” and “royalty stacking.” The District Court’s determination of a FRAND royalty rate and range can be found in Public Version of Findings of Fact and Conclusions of Law.
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