W.D. Wash.

10-cv-01823
Microsoft v. Motorola
(FRAND contract action)
Findings of Fact and Conclusions of Law
of April 25, 2013
(FRAND rate-setting further to November 2012 bench trial)
public redacted version of April 19, 2013 order

UNOFFICIAL TABLE OF CONTENTS
(Florian Mueller, FOSS Patents)

INTRODUCTORY PART .................................................................................... ..............p1

I.

THE PARTIES .................................................................................................. §1 ..............p9

II.

STANDARDS & STANDARD-SETTING ORGANIZATIONS....................... ............p10

A.

Background ...................................................................................................... §10 ............p10

B.

Patented Technology in Standards ................................................................ §17 ............p12

C.
i.
ii.
iii.

SSO Intellectual Property Policies and the RAND Commitment ............... §24 ............p13
The ITU/ISO/IEC Patent Policy ........................................................................ §26 ............ p14
The IEEE Intellectual Property Rights Policy ................................................... §37 ............ p17
The The ITU and IEEE are Silent as to What Constitutes RAND .................... §49 ............ p20

D.

The Purpose of the RAND Commitment ....................................................... §51 ............p20

III.

ECONOMIC GUIDEPOSTS FOR ASSESSING RAND TERMS ................... ............p25

A.

Basic Principles ................................................................................................ §70 ............p25

B.

Microsoft's Approach ...................................................................................... §75 ............p27

C.

Motorola's Approach ...................................................................................... §83 ............p29

D.

The Hypothetical Negotiation ......................................................................... §94 ............p33

IV.

THE H.264 STANDARD ...................................................................................... ............p41

A.

Background on Video Processing................................................................. §114 ............p41

B.

Interlaced and Progressive Video ................................................................ §118 ............p42

C.

Compressing Interlaced Video ..................................................................... §123 ............p43

D.
i.
ii.
iii.
iv.
v.

Background of the H.264 Standard ..................................................................... ............p45
Overview and Development of H.264 Standard .............................................. §129 ............ p45
Timeline of Development ................................................................................ §135 ............ p47
The Profiles and Levels of the H.264 Standard ............................................... §143 ............ p48
Intellectual Property Relating to the H.264 Standard ...................................... §154 ............ p52
Motorola's Contribution to the Development of the H.264 Standard .............. §158 ............ p53

E.
i.
ii.
iii.
iv.
v.
vi.

Motorola's Patents ......................................................................................... §163 ............p54
The Krause Patent Family ............................................................................... §165 ............ p55
The Wu Patent Family ..................................................................................... §175 ............ p58
The Eifrig Patent Family ................................................................................. §185 ............ p61
The MBAFF Patent Family ............................................................................. §197 ............ p64
The PAFF Patent Family ................................................................................. §219 ............ p72
The Scan Patent Family ................................................................................... §239 ............ p77

F.
i.
ii.
iii.
iv.

Motorola's H.264 Patents and Microsoft's Products.................................. §257 ............p83
Importance of Interlaced Video in the Marketplace ........................................ §261 ............ p84
Windows .......................................................................................................... §281 ............ p90
The Xbox ......................................................................................................... §290 ............ p93
Other Microsoft Products ................................................................................ §302 ............ p96

V.

THE 802.11 STANDARD ..................................................................................... ............p96

A.

The Development of the 802.11 Standard ................................................... §308 ............p96

B.

The Relative Technical Value of Different Portions of the
802.11 Standard ............................................................................................. §324 ..........p100

C.

Many Patents Cover the 802.11 Standard ................................................... §333 ..........p102

D.
i.
ii.
iii.
vi.
a.

Motorola's 802.11 Patents ............................................................................. §338 ..........p104
Motorola's Essential Patents ............................................................................ §339 .......... p105
Motorola Agrees that Only the Microsoft Xbox Uses its 802.11 SEPs .......... §347 .......... p108
The Xbox Does Not Use All of Motorola's 802.11 SEPs................................ §351 .......... p109
The Importance of Motorola's 11 SEPs to the Standard and to the Xbox ....... §353 .......... p110
Channel Access Management Patent............................................................... §354 .......... p111

b.
c.
d.
e.

Data Modulation (a/g/n) Patents ...................................................................... §364 .......... p114
Network Setup Patents .................................................................................... §374 .......... p118
Data Modulation (b/g) Patents......................................................................... §385 .......... p121
Security Patents ............................................................................................... §395 .......... p125

VI.

APPROPRIATE RAND ROYALTIES FOR MOTOROLA'S SEPs ............... ..........p129

A.
i.
ii.
iii.
iv.

Motorola's Suggested Comparables .................................................................... ..........p130
The VTech License Agreement ....................................................................... §407 .......... p132
The RIM License Agreement .......................................................................... §421 .......... p135
The Symbol License Agreements .................................................................... §436 .......... p140
Stacking Issues with the Rates Motorola Seeks .............................................. §455 .......... p145

B.
i.
ii.
a.

c.
iv.
a.
b.
c.
v.
a.
b.
c.

Microsoft's Suggested Comparables .................................................................... ..........p149
Overview of Patent Pools ................................................................................ §462 .......... p149
The MPEG LA H.264 Patent Pool .................................................................. §467 .......... p150
Background Regarding the Formation of the MPEG LA H.264
Patent Pool ....................................................................................................... §469 .......... p151
The MPEG LA H.264 Pool Today .................................................................. §488 .......... p157
The MPEG LA H.264 Pool as an Indicator of RAND Terms for
Motorola's H.264 SEPs .................................................................................... §496 .......... p159
Google's Status as an MPEG LA H.264 Patent Pool Licensee ....................... §516 .......... p167
RAND Royalties for Motorola's H.264 SEPs Based on the MPEG LA
H.264 Patent Pool ............................................................................................ §519 .......... p168
The Via Licensing 802.11 Patent Pool ............................................................ §547 .......... p179
Background of the Via Licensing 802.11 Patent Pool .................................... §548 .......... p179
The Via Licensing 802.11 Pool as an Indicator of RAND Terms for
Motorola's 802.11 SEPs................................................................................... §556 .......... p181
RAND Royalties Based On The Via 802.11 Pool ........................................... §184 .......... p681
The Marvell Wi-Fi Chip .................................................................................. §578 .......... p189
Background On The Marvell Wi-Fi Chip ....................................................... §579 .......... p189
The ARM Benchmark Rate ............................................................................. §583 .......... p191
The ARM Benchmark Rate as an Industry Indicator ...................................... §588 .......... p193
The InteCap Analysis .............................................................................................. .......... p194
Background of the InteCap Analysis ............................................................... §591 .......... p194
The InteCap Evaluation As An Indicator of a RAND Royalty ....................... §598 .......... p196
RAND Royalties Based on the InteCap Analysis ........................................... §608 .......... p200

C.

A Reasonable Royalty Rate for Motorola's 802.11 SEP Portfolio ............ §613 ..........p201

VII.

CONCLUSION ...................................................................................................... ..........p207

b.
c.
d.
e.
iii.
a.
b.

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