Google Inc. (NASDAQ:GOOG), which has been fighting a well-known proxy battle with Apple Inc. (NASDAQ:AAPL), has also been fighting a licensing and patent skirmish against Microsoft Corporation (NASDAQ:MSFT), and in the most recent legal salvo, Google came out on the losing end despite using a significant patent portfolio by Motorola Mobility. That $12.5-billion move may pay off in the long term, but it does put Google Inc. (GOOG) in courtrooms more often, which is an approach watched closely by investors like billionaire fund manager David Tepper of Appaloosa Management LP.
Several Android partners of Google Inc. (NASDAQ:GOOG) had given into demands from Microsoft Corporation (NASDAQ:MSFT) to pay licensing fees for several patents that Microsoft claimed. Rather than completely rework their handsets, they decided to pay Microsoft Corporation (MSFT) for every Android handset they sell in the marketplace. But Google Inc. (NASDAQ:GOOG) has been using its patent-rich Motorola Mobility acquisition to directly challenge Microsoft, and Google Inc. (GOOG) managed to get a German court to ban Xbox 360 and a couple of other Windows products due to possible infringement of Motorola patents.
However, a U.S. appeals court upheld a lower court ruling that stated that Google Inc. (NASDAQ:GOOG) had no legal right to pursue a sales injunction against Microsoft Corporation (MSFT) in Germany. The bottom line, the 9th U.S. Circuit panel ruled, “(T)his case is a private dispute under Washington state contract law between two U.S. corporations.”
On the other hand, Google Inc. (NASDAQ:GOOG) Android handsets have been banned in Germany due to claims from Microsoft Corporation (NASDAQ:MSFT) of infringement, which may end up in Android-based Motorola handsets being destroyed in Germany.
So a U.S. court can rule that Microsoft Corporation (MSFT) can’t be banned in a foreign country, but Microsoft is free to pursue a foreign ban against Motorola Mobility and Google Inc. (NASDAQ:GOOG)? There may be some legal questions about the authority of a U.S. court to affect foreign commerce, but htere is also a question about where the line is drawn between banning one company from sales bans but not the other in a patent battle. Is it based on handsets and hardware vs. software? Is it about the timing of the lawsuits?
Does Google Inc. (NASDAQ:GOOG) have a right to question this case? Should it be able to pursue bans in other countries, and does it have a case to have its Motorola sales ban lifted in Germany?