The conduct of both Microsoft and Motorola in their battle over patent licencing fees has been criticised by the court.
The behaviour of both parties "has been driven by an attempt to secure commercial advantage… it has been arbitrary, it has been arrogant, and frankly it has been based on hubris," said Judge James Robart of the US District Court of Western Washington.
"The court is well aware it is being used as a pawn in a global, industry-wide business negotiation," he added.
The case will settle the question of whether Motorola is demanding unreasonable licensing fees from Microsoft for some of its patents. It could also play a role in whether Microsoft is able to import Xbox consoles – currently made in China – into the US.
A ruling in Motorola’s favour would see Xbox manufacturing costs rise steeply as their production would be forced to shift to the US.
The impending ruling may also affect the ability of Microsoft to sell Xbox and Windows products in Germany.
Microsoft contends that Motorola is demanding unreasonable licensing fees for some of its standards-essential patents, which Microsoft claims have become standard-use within the industry.
Motorola’s position is that taking a 2.25 percent cut of the sale price of products that the patents are used in – Xbox and Windows – is fair.
Microsoft's main argument is that such a rate is far too high because Motorola's patents form a very small percentage of the Windows operating system, and that a 2.25 percent cut would amount to USD $4 billion annually.
In the most recent arguments, Microsoft claimed that Motorola violated its agreement to provide standards-essential patents on reasonable terms when it sent the letter demanding 2.25 percent.
Motorola replied that that letter was merely an opening offer to further negotiations, and that Microsoft gave up its rights to Motorola's standards-essential patents on reasonable terms when it didn't negotiate, instead choosing to sue.
Motorola also dispute the USD $4 billion figure, and claim that Microsoft counted the 2.25 percent cut multiple times if multiple patents were involved in a product.
Judge Robart reserved judgement on the motions as he needed more time to consider the arguments, although his preliminary view was that he would likely deny Microsoft's motion that Motorola breached its contract, and that he would likely deny Motorola's motion that Microsoft gave up its right to licenses under reasonable terms as well.
"We look forward to seeing Judge Robart's decision on today's hearing and we are pleased the temporary restraining order remains in place pending the further ruling from the court," said a statement from Microsoft.
Motorola released the following statement: "We remain confident that Motorola Mobility has honored its FRAND commitments, and have a long history of successful and amicable cross-licensing relationships with more than 50 companies. Despite this, Microsoft has refused to negotiate and has instead initiated and continued to pursue an aggressive litigation strategy aimed at attacking Motorola Mobility and the Android platform. Regardless of their transparent tactics, we are focused on resolving this matter in a way that fairly compensates Motorola Mobility for the use of our valuable IP and protects the interests of our stakeholders."
Motorola is in the process of being acquired by Microsoft competitor Google.