Microsoft abandons German hub over Motorola patent threat

Chris Davies - Apr 3, 2012
Microsoft abandons German hub over Motorola patent threat

Microsoft may have succeeded in getting Motorola investigated by the EC over potential antitrust behavior, but the company is still shifting operations from Germany over fears of patent-based attack. The company’s European distribution center has, until now, been in Germany and operated by logistics specialist Arvato but, Microsoft has confirmed, “the risk of disruption from Motorola’s patent litigation” in the country means it will be moved to the Netherlands.

“We have a great relationship with Arvato, and we are pleased with the quality of their service. But Motorola’s refusal to live up to its patent promises has left us no choice,” a Microsoft spokesperson said of the decision. “We would have preferred to keep our European distribution centre with Arvato in Germany as it has been for many years, but unfortunately the risk of disruption from Motorola’s patent litigation is simply too high.”

The European Commission announced earlier today that it would be investigating Motorola Mobility over alleged misuse of standards-essential patents, the result of complaints filed by Microsoft and Apple back in February. At the time, Microsoft claimed that Motorola’s royalty demands were excessive in comparison to those of other companies with patented technologies. In fact, it claimed Motorola was asking for 1,125x the amount other firms were looking for.

On a $1,000 Windows PC, Microsoft said, Motorola was looking for $22.50 in royalties for patents connected to H.264 video. That jumps to $45 for a $2,000 PC, supposedly, based on the more expensive components and not, Microsoft argued, any difference in the Windows OS it runs or, indeed, the video experience itself.

The Arvata facility handles European supplies of boxed software, games and Xbox 360 hardware, DPA reports, and Microsoft’s apparent concern is that, should Motorola secure the sort of injunction it achieved against Apple back in February (albeit swiftly suspended), it could lock down distribution from the center. There’s less chance of that happening if the distribution is handled outside of Germany, since patent law is practiced significantly differently elsewhere in Europe.

Must Read Bits & Bytes