Court Case Might Tilt Toward Tech Manufacturers Vs. Patent Holders

A U.S. appeals court heard arguments Wednesday in a smartphone patent case that could offer leverage to manufacturers in negotiations with holders patents on technology required to achieve industry wide standards.

Google Inc GOOGL is seeking to overturn a 2013 court decision that Motorola sought too much money for licenses to Microsoft Corporation MSFT of so-called standard-essential patents.

Royalties on such patents are generally granted under reasonable and non-discriminatory terms, or RAND, as laid out by industry standards-setting organizations.

Google acquired Motorola in 2011 and later sold the company to Lenovo Group Ltd. LNVGY, but retained its patent portfolio.

Microsoft sued Motorola in 2010 after the handset maker asked for 2.25 percent of the final product price for use of several standards-essential patents related to WiFi and video compression technology, according to the Financial Times.

Motorola's demand would have cost Microsoft $4 billion annually, but a federal court in Seattle calculated Motorola royalties of less than $2 million a year.

Making strange bedfellows in the case, Microsoft unit Nokia filed an amicus brief in support of Motorola's current appeal.

A long list of technology companies filed briefs supporting Microsoft in the case, including Apple Inc. AAPL, Intel Corporation INTC, Dell Inc.DELL and Hewlett-Packard Company HPQ.

The case is part of a larger and ongoing patent war among smartphone manufacturers that have included well over 100 significant court actions since 2009.