After reporting that a German court granted an injunction against Microsoft and a number of their products earlier this month for infringing on four of Motorola’s patents, administrative law judge David Shaw has recently recommended that the Xbox 360 should see the same sales and import ban in the U.S. that its’s seeing in Germany. However, the ban has not been enforced in Germany because of the current proceeding taking place in the U.S.
The case is set to move to the ITC’s board of commissions, where a decision as to whether the ruling should be changed or passed on to the Obama administration will be made by August 23 by the six person board. If it is passed on, President Obama will have a sixty-day review period to either allow or overturn the decision.
Microsoft has argued that public interest is not something that Shaw has considered, and that by banning the console, consumers would only have two viable options in the home console market: the PlayStation 3 and the Nintendo Wii. Shaw dismissed this proposition, arguing that Microsoft has not shown any proof that Sony or Nintendo were incapable of satisfying the demand for consoles for consumers and that the intellectual property rights outweigh any potential economic impact of the video game console market.
Shaw has since recommended a cease-and-desist order should be enforced by the commission to prevent sales of the Microsoft console. This accompanies his recommendation that Microsoft should post a bond equal to 7% of the declared value of unsold Xbox inventory already in the U.S.
Reportedly, Microsoft is feeling confident that the Commission will rule in the their favor, believing that Motorola will be “held to its promise to make its standard essential patents available on fair and reasonable terms for the benefit of consumers who enjoy video on the web.” Notably, the ITC has also ruled in Microsoft’s favor last week for a sales and import ban on all Motorola smartphones and tablets for a patent violation on those devices.
Analysis: Just to clarify on the matter, as of right now, the Xbox 360 isn’t banned in the United States, although it is astonishing to think that no Xbox 360’s and Motorola devices will be sold or imported is a possibility. How one would go about replacing their console if the red ring of death were to strike was one of the first things to cross my mind.
Obviously, this would be a major blow to both companies: Microsoft would have to pay Motorola for every Xbox 360 sold in the country, that being over 25 million at this point; and Motorola would lose essentially the entirety of their business in a gigantic market.
However, I doubt the whole situation will come to that. I would expect the two companies to settle their differences and come to an agreement, choosing to license their respective patents to the other before either company faces the massive losses and ramifications if the rulings did come to pass.