Motorola Surprises Microsoft - The Germany-Seattle-FTC FRAND Saga Continues ~pj Updated 2Xs

We find out now what the additional evidence is that caused Judge James L. Robart in Seattle to reopen the November trial in Microsoft v. Motorola and to ask for further briefing on the Google-MPEG LA license. Motorola just informed [PDF] the Seattle court that it has accepted Microsoft's August 2012 offer of payment for Motorola's German patents. It attaches as Exhibit A the agreement [PDF] and a cover letter [PDF], Exhibit B, it sent to Microsoft's German lawyer, saying it accepts the prior offer. Motorola tells Judge Robart, "These are the documents discussed at the telephonic conference with the Court on February 12, 2013."

So now we know.

The royalty Microsoft offered to pay is so low, you'd think Microsoft would be thrilled Motorola said yes -- 2 pennies per unit up to 10 million units, and 1 penny afterward, figures that Motorola accepts while stating clearly that it's not a FRAND rate in Motorola's eyes. Motorola earlier refused the offer. Why the change? And why is Microsoft going ballistic and whining to the judge [PDF] and to the FTC [PDF], telling the FTC that Motorola is violating the FTC's January order? Here's the part in Motorola's letter to the judge that seems to be causing Microsoft so much anxiety, and where you see GI, it means General Instrument Corporation, of which Motorola is a subsidiary the parent and GI the subsidiary [PJ: Sorry for the confusion.]:

Pursuant to German law, Microsoft owes GI the royalties specified in the license agreement as well as past damages to compensate GI for Microsoft's prior infringing use of GI's patents. See Exhibit B.

Past damages will be calculated in further proceedings in the German courts pursuant to German damages law.

Motorola recognizes that Microsoft appears to dispute that the Orange Book license is executed and enforceable in Germany. That issue-as well as past damages-will be decided by the German courts in due course.

As you can see, this move by Motorola could, if it stands (which is by no means certain), remove certain issues away from Judge Robart and potentially increase the amount of money Microsoft has to pay Motorola for past damages in Germany. At least that is what Microsoft claims. I'll show you all the details. One thing is obvious. Microsoft never saw this coming, and it is very unhappy about it.