Microsoft Corp. v. Motorola, Inc.
United States District Court for the Western District of Washington
2013 WL 2111217 (2013)
Motorola (defendant) held patents essential to the H.264 video-coding standard and had committed to license them on reasonable and non-discriminatory (RAND) terms, but offered Microsoft (plaintiff) a royalty of 2.25% of the price of Microsoft products using the technology. Microsoft argued this offer breached Motorola's RAND obligations and sued for breach of contract, prompting the court to determine an appropriate RAND royalty rate for Motorola's standard-essential patent portfolio.
Whether, in a dispute over a proper reasonable and non-discriminatory terms royalty rate, the proper rate should be determined by a judicial simulation of a hypothetical, bilateral negotiation.