In a not-so-surprising development in light of the FTC-Google/Motorola settlement announced last week, Google subsidiary Motorola Mobility asked the ITC yesterday to drop its two remaining standard-essential patents from its Xbox infringement dispute with Microsoft (Inv. No. 337-TA-752).  The two patents dropped from the case — U.S. Pat. Nos. 6,980,596 and 7,162,094 — are alleged by Motorola to be essential to the ITU-T H.264 video coding standard.  Given that the only relief that the ITC may grant is of an injunctive nature (whether an exclusion order or a cease & desist order), Motorola’s action appears to be consistent with the principles set forth in the FTC settlement, in which Google and Motorola agreed to forego seeking injunctive relief for SEPs except in certain extraordinary circumstances.

For those unfamiliar with this particular part of the larger Microsoft-Motorola dispute, a brief summary is in order.  In November 2010, Motorola Mobility brought a Section 337 complaint in the ITC, accusing Microsoft’s Xbox of infringing several patents Motorola alleged as essential to the 802.11 wireless networking and H.264 video coding standards (along with one non-essential patent).  A hearing was held in the case back in January 2012, and ALJ David P. Shaw issued an initial determination finding a violation of Section 337 on four of the five patents-at-issue — including both of the H.264-essential patents and one 802.11-essential patent.  However, the full Commission remanded the case back to ALJ Shaw in order to allow him to consider the holdings of a recent ITC case (and to rule on a pending Microsoft motion).  In October 2012, Motorola filed a motion requesting that the two 802.11-essential patents be dropped from the case, which was granted by the ALJ.  In December 2012, the remand hearing was held on the three remaining patents before ALJ Shaw, who is expected to issue a remand initial determination by March 2013.

But now any initial determination will only relate to the one (non-essential) patent (U.S. Pat. No. 6,069,896) still remaining in the case.  While Motorola’s motion to terminate the two H.264 patents from the investigation was likely prompted by the FTC consent agreement, the motion does not mention the settlement anywhere.  Motorola did include a paragraph explaining that:

Motorola Mobility does not waive any rights, including for past damages, in its currently-pending lawsuits against Microsoft in the U.S. District Courts for the Western District of Washington [the RAND contract action] and the Western District of Wisconsin [the district court counterpart to this ITC case].  Motorola intends to enforce its rights for past damages in the District Court lawsuits.

Therefore, it is clear that the patents were dropped to take injunctive relief off the table for Motorola’s SEPs, in compliance with the FTC settlement, but that Motorola still wants to be compensated for Microsoft’s alleged infringement.

The attention in this dispute now turns to Judge Robart’s court in the Western District of Washington — where Judge Robart is expected to soon issue an opinion setting a RAND rate for Motorola’s H.264 and 802.11-essential patents (although likely after a hearing in late January to discuss the implications of a license agreement between Google and MPEG LA).