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UNITED STATES DISTRICT COURTWESTERN DISTRICT OF WASHINGTONAT SEATTLEMICROSOFT CORPORATION,Plaintiff,v.MOTOROLA, INC., et al.,Defendants.CASE NO. C10-1823JLRORDERMOTOROLA MOBILITY, INC., etal.,Plaintiffs,v.MICROSOFT CORPORATION,Defendant.
Case 2:10-cv-01823-JLR Document 318 Filed 05/14/12 Page 1 of 25
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I. INTRODUCTION
This matter is before the court on Plaintiff Microsoft Corporation’s (“Microsoft”)motion for temporary restraining order and preliminary injunction (“Microsoft’sMotion”).
(Mot. (Dkt. # 209).) The court heard the oral argument of counsel on April11, 2012, and has also considered all pleadings on file, including: (1) Plaintiff MicrosoftCorporation’s (“Microsoft”) motion for a temporary restraining order and preliminaryinjunction (Mot. (Dkt. # 209)), along with all exhibits and attachments; (2) DefendantsMotorola, Inc., Motorola Mobility, Inc., and General Instrument Corporation’s(collectively, “Motorola”) response in opposition (Resp. (Dkt. # 248)), along with allexhibits and attachments; and (3) Microsoft’s reply (Reply (Dkt. # 257)). Being fullyadvised, the court GRANTS Microsoft’s motion for a preliminary injunction.
II. BACKGROUNDA.
The IEEE and the ITU as Standard Setting Organizations
Microsoft and Motorola are both members of the Institute of Electrical andElectronics Engineers (“IEEE”) and the International Telecommunication Union (“ITU”).The IEEE and the ITU, neither of which are parties to the instant dispute, are
1
While the parties in this action have both filed affirmative claims, because (as explainedherein) Microsoft filed the complaint initiating the instant action, for purposes of this order, thecourt names Microsoft as the “plaintiff.”
2
On April 12, 2012, the court granted Microsoft’s motion for a temporary restrainingorder. (TRO Order (Dkt. # 261).) The court’s April 12, 2012 order was limited to enjoiningMotorola from enforcing any injunctive relief that it may receive from a Germany court withrespect to the patents at issue in Microsoft’s Motion. (
Id.
at 2.) The temporary restraining orderwas to remain in effect until May 7, 2012. (
Id.
at 3.) On May 7, 2012, the court extended thetemporary restraining order until the time it issued a ruling on Microsoft’s concurrent motion fora preliminary injunction. (5/7/12 Transcript (Dkt. # 315) at 106.)
Case 2:10-cv-01823-JLR Document 318 Filed 05/14/12 Page 2 of 25
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international standards setting organizations. Standards setting organizations play asignificant role in the technology market by allowing companies to agree on commontechnological standards so that all compliant products will work together. Standardslower costs by increasing product manufacturing volume, and they increase pricecompetition by eliminating “switching costs” for consumers who desire to switch fromproducts manufactured by one firm to those manufactured by another.One complication with standards is that it may be necessary to use patentedtechnology in order to practice them. If a patent claims technology selected by astandards setting organization, the patent is called an “essential patent.” Here, Motorolais the owner of numerous patents “essential” to certain standards established by the IEEEand the ITU. (
See
10/21/10 Motorola Offer Ltr. (Dkt. # 79-5); 10/29/10 Motorola OfferLtr. (Dkt. # 79-6) (see list of attachments).) In order to reduce the likelihood that ownersof essential patents will abuse their market power, many standards setting organizations,including the IEEE and the ITU, have adopted rules related to the disclosure andlicensing of essential patents. The policies often require or encourage members of thestandards setting organization to identify patents that are essential to a proposed standardand to agree to license their essential patents on reasonable and non-discriminatory(“RAND”) terms to anyone who requests a license. Such rules help to insure thatstandards do not allow essential patent owners to extort their competitors or prevent themfrom entering the marketplace.
Case 2:10-cv-01823-JLR Document 318 Filed 05/14/12 Page 3 of 25
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12-05-14 MSFT MMI Preliminary Injunction
May 14, 2012 Preliminary Injunction Order by the United States District Court for the Western District of Washington, barring Motorola Mobility from the enforcement of a German standards-essential patent injunction against Microsoft until the district court…
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