Tech companies oppose USITC's proposed import ban on Xbox

IBM, Intel and Apple are among the companies that write the commission to oppose a judge's recommendation

The U.S. International Trade Commission should not ban the import of Microsoft's Xbox 360 gaming console into the U.S., as an administrative law judge there has recommended, because of the negative effects on the technology industry, some tech vendors and trade groups have told the commission.

IBM, Intel, Nokia, Cisco Systems, Apple and the Entertainment Software Association were among the organizations filing comments opposed to USITC Judge David Shaw's recommendation in May that the commission ban the import of the Xbox 360 because of alleged infringement of four H.264 video decoding patents owned by Motorola Mobility and parent company Google.

The commission is scheduled to decide on June 25 whether to review Shaw's determination. If the commission does not review the decision, Shaw's recommendation of an import ban would go into effect.

Motorola had previously committed to licensing the video codec standard on reasonable and non-discriminatory (RAND) terms, and the company's decision to file a USITC patent complaint reneges on that promise, Intel wrote in its Friday filing with the commission.

"Motorola's contractual promises to accept compensation from all users of the standards leave no room for barring parties willing and able to pay RAND royalties from selling standard-compliant products," Intel's lawyers wrote.

An import ban would be "detrimental" to IBM, its lawyers wrote. Some of the Xbox's parts are manufactured by IBM in the U.S., IBM's lawyers wrote. "IBM will therefore suffer commercial harm" if the Xbox cannot be imported, they added.

An Xbox import ban would harm many companies and consumers, the Entertainment Software Association wrote in Friday comments to the USITC.

"The video game industry is a significant contributor to the U.S. economy and job growth, and reaches American consumers of all walks of life," the trade group's lawyers wrote. "An exclusion order banning the importation of Xbox gaming consoles into the U.S. would harm not only Microsoft, but a variety of other parties across the gaming ecosystem, including most importantly consumers and game publishers."

Motorola Mobility does not sell video game consoles, and would "suffer no commensurate harm" if the USITC refuses to ban Xbox imports, the group said.

A Motorola spokeswoman wasn't immediately available for comment, but Motorola lawyers have argued that the judge's decision was justified. USITC rules do not make an except for import bans when the complaining company does not offer a competing product, Motorola's lawyers wrote.

The competition argument from Microsoft and its allies "ignores that personal electronics technologies are converging and that the accused Xbox products are more than just video game systems -- the Xbox 360 is marketed by Microsoft as an entertainment system that represents, among other things, 'the future of TV,' in direct competition with Motorola's domestic industry set-top box products," Motorola's lawyers wrote in late May.

Microsoft has made "sweeping statements" about Motorola's RAND commitments, but the Xbox maker has not suggested that any of the four disputed patents are essential to practicing the H.264 or related video standards, Motorola's lawyers wrote. Microsoft has not established whether two of the patents were "even subject to a RAND commitment," they wrote.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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