The Microsoft v. Motorola Order on RAND, as text, plus Some Appeal Issues ~pj Updated

I've found some materials that I think will help us to put the order [PDF] from Judge James Robart in context, the order setting a RAND rate for Microsoft to pay Motorola. From the materials, particularly this report [PDF] from a conference on patent pools and standards bodies held in Brussels in April, 2012, I think you will see that the judge has used the wrong ruler, namely patent pools, to set a rate that is not fair to Motorola for its standards patents. And as you will see, that is the very danger that the conference highlighted, that patent pools can impede innovation, by lowering the price for newcomers to a field who wish to merely implement the standard, like Microsoft, by letting them unfairly underpay those who did the research to develop the standard, as in Motorola.

I'm getting the impression that the judge is just guessing at a rate in places, and from the wrong starting point too, and if you look at the footnotes, you'll see what I mean. Whenever he has insufficient evidence, instead of saying, "Well, I guess I can't figure that out on this record," he says, "I have insufficient evidence, so I'll just set the lowest rate." Here's just one example, footnote 24:

²⁴ Motorola contends that Microsoft products other than Windows and the Xbox use the H.264 Standard. Motorola lists at least the Windows Phone 7 and 7.5, Windows Embedded, Silverlight, the Zune, Lync, and Skype, as Microsoft products that use the H.264 Standard. (Motorola Pr. FC ¶ 535.) Motorola, however, did not provide sufficient evidence for the court to ascertain the functionality ofthese products, making it impossible for the court to determine the importance of Motorola's H.264 SEPs to these products. Indeed, the little trial evidence regarding functionality of these additional products demonstrates that Motorola's SEPs would have little value to them. (See 11/14/12 Tr. at 150 (Orchard Testimony).) Without such evidence, the court is left to conclude that the low bound of RAND is the appropriate royalty rate for all Microsoft products -- Windows, the Xbox, and all others.

But Microsoft is the one asking that the court set a RAND rate, not Motorola, so it has the burden of proving what a RAND rate should be on the other products. So presenting sufficient evidence to support a decision is not, as I understand it, Motorola's burden. So why didn't the judge say, I can't set the rate on these others products because *Microsoft* didn't provide enough evidence? Or, if he insisted on setting a royalty, set it at the highest rate, or even at an average? That's where the pro-Microsoft bias shows through, to me. That's only one place where I see an appeal issue that favors Motorola, if it chooses to appeal.

I'm most of the way doing a text version for you of the order itself, but it's 207 pages, and I'm very interested in you guys quickly taking a look at the way the judge writes about the tech and also his math in figuring out the royalty. You'll find that mostly in the footnotes, which are done. I'll keep working on the grunt work of cleaning up the text version, which is still OCR-messy, while you do that part. You have the PDF, and the text is understandable at least, while I work to perfect it. So, let's each get to work.