Microsoft filed an antitrust suit against Delaware-based InterDigital on Thursday. The tech giant accused InterDigital of demanding too much payment for the license patents that play a vital role in the implementation of mobile phone technologies, as reported by Reuters. The standard-essential patents (SEPs) are at the heart of the claim made by Microsoft.
Entire tech industry watching the Microsoft case
A case against Google was filed by Microsoft with a similar argument regarding Motorola patents, which the software titan recently won. Now, with this case, Microsoft is trying to set a legal precedent to limit the amount paid for licensing key requirements for standardized technologies. The future licensing negotiations will be notably impacted by these legal precedents, and therefore, the case has drawn the attention of the tech industry.
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Microsoft and InterDigital have been battling each other for several years now. Microsoft’s Nokia phones have been accused of infringing InterDigital patents, and a decision on this matter will be issued by the U.S. International Trade Commission sometime later this month.
Both companies have approached courts with different charges. On one hand, there is Microsoft accusing InterDigital of charging unlawfully high prices for licensing the required patents, and on the other hand, InterDigital is accusing Microsoft of not licensing enough patents.
Licensing fee an issue for tech firms
Electronic manufacturers have to comply with the industry standards, like the size of a headphone jack, to ensure the compatibility between devices from different brands. Since the standard-essential patents to a particular technology are owned by a particular company, and are needed by every company engaged in manufacturing the same, patent owners often misuse this leverage to their advantage by charging unlawfully high prices.
Limits have been set by the courts and the industry groups on the licensing fees charged with an intention of encouraging co-operation between the various companies within the industry. That means Microsoft can win this case if it can show the court that the amount being asked by InterDigital exceeds the set limits.
A similar argument was won by Microsoft against Google after a U.S. District Court Judge went for an unusual solution to the problem, wherein the judge devised his own method of determining a fair price for licensing.