Microsoft doesn't want to pay more than $502,000 a year to license Motorola's video patents.
While Microsoft believes it shouldn't pay more than $502,000 a year to license Motorola's video patents, the Google-owned smartphone manufacturer has demanded between $100 million and $125 million on an annual basis.
Court filings revealed that Microsoft is willing to pay as much as $502,000 per year to license Motorola's H.264 video patents. The software giant also said it would pay as much as $736,000 for Motorola's 802.11 wireless technology.
Motorola, however, doesn't want to settle with a one-off fee. It wants Microsoft to pay a percentage of its revenue stemming from the allegedly infringing products; it wants a 2.25 percent royalty on H.264 technology, which would range between $100 million and $125 million per year in fees.
The company is also demanding a royalty payment of 1.15 percent to 1.73 percent for its WiFi patents, which could possibly lead to further tens of millions of dollars per year.
Microsoft argued that its rival's H.264 and WiFi patents should be offered at a "fair rate" due to the fact that they're standard-essential intellectual property. Should businesses license standard-essential patents, they are required to request fees that are considered fair, reasonable and nondiscriminatory (FRAND).
The Windows creator has maintained its position regarding Motorola's 2.25 percent royalty request being unfair. The latter has also alleged that the Xbox 360 violates its patents as well. That said, a judge recently ruled that Moto will not be granted an injunction against Microsoft products in the U.S. and Germany.