It looks like that possible Xbox 360 sales ban won’t be happening in 2012—if at all—thanks to a timely and convenient legal hurdle provided by the International Trade Commission.
That news comes straight from the Foss Patents blog, where analyst Florian Mueller states that the court battle between Microsoft and Google/Motorola Mobile may actually wind up fizzling down to nothing. That’s good news for Microsoft, as the company (and several video game developers) stood to lose a lot of money this holiday season with an Xbox 360 ban.
According to Mueller, the initial recommendation for a ban by Administrative Law Judge David Shaw is being altered by the ITC with a “remand”—basically, a mandatory change of the judge’s original ruling:
This remand causes substantial delay, and time is not on Google’s side: in mid-November, less than five months from now, Microsoft’s FRAND enforcement lawsuit against Motorola will go to trial in Seattle. The outcome of that litigation is going to be a license agreement on terms set by the court. Once Microsoft is licensed, there is no more scope of import bans.
Since one court case directly affects the other, the patent violation cited by Google/Motorola would be swept under the rug if Microsoft won their Seattle case.
Just to recap, Microsoft’s fair, reasonable, and non-discriminatory terms (FRAND) lawsuit against Motorola would give them the freedom to use essential technology patents that build the foundation of basic elements in services like video stream. Generally, the idea behind FRAND is that no company can monopolize technology that should reasonably be available to anyone.
Without FRAND, it would be easy for (as an example) Apple to have a patent on app development, rendering any other company unable to mimic the way it’s implemented in phones and tablets. That would prove disingenuous to the mobile market, as Apple would have an unfair advantage in the production and publishing of mobile software and applications.
For their part, Motorola must’ve sensed that something like this would happen, as they already approached Microsoft about reaching a settlement. Microsoft’s legal team apparently smelled blood, utterly rejecting Motorola Mobility’s terms.
Since there will now have to be a new ALJ determination, which may easily take several months, followed by a Commission review and, potentially, a 60-day Presidential review before any import ban can enter into force, it’s practically impossible that Google can actually get an ITC import ban before the Seattle lawsuit takes care of the standard-essential patents at issue in this investigation (all of the asserted patents with only one exception).
Even with respect to the non-standard-essential patent (which Microsoft is presumably able to work around), the remand means that there won’t be a U.S. import ban on the Xbox in 2012, including the extremely important Christmas Selling Season.
It’s not a complete victory for Microsoft yet, as the patent litigation is still alive. But the important thing for the company is that they won’t have to focus their legal resources towards fighting off a console ban this winter.
Looking at the big picture, the gaming industry avoided an extremely interesting shift of power. Even though the Xbox 360 isn’t new by any technological standards, the console still sells enough units, games, and associated accessories that its absence during the 2012 holiday season would drastically change the balance of the “Big Three” console makers.