ITC rules Microsoft's phones don't infringe patents

Decision reverses previous determination a week after Microsoft sued the patent holder

Microsoft has prevailed over InterDigital in a years-old patent infringement action that was originally brought against Nokia in front of the U.S. International Trade Commission.

On Friday, the commission ruled that Nokia phones don't infringe on patents held by InterDigital relating to 3G cellular data standards, overturning a previous decision from earlier this year. It's good news for Microsoft, since the ITC has the power to block imports of products that it determines are infringing patents.

It's just one more step in a long case, which started when InterDigital filed a complaint with the ITC in August 2007.

The mobile landscape is very different now than when the complaint was opened eight years ago. In 2007, Nokia was still the dominant player in the mobile phone market, and the iPhone had just launched. Since then, Microsoft acquired Nokia's devices and services business -- along with this litigation. Now, Microsoft has curtailed its mobile phone production ambitions: it recently announced it would cut 7,800 jobs primarily in its mobile phone unit and take a $7.6 billion write-down on its acquisition of Nokia.

InterDigital CEO Bill Merritt said that while he was disappointed with the decision, it wouldn't mean much for the company's business. The firm will continue developing technology for future standards and pursuing licensing fees for the patents it already holds.

"Today's decision is disappointing but is expected to have a limited impact on our going-forward business, given the decline of the Nokia mobile device business under Microsoft's control and its limited market position," he said in a statement.

Microsoft said it was pleased with the ITC's decision, and that it would continue its fight against InterDigital through an antitrust lawsuit it filed last week.

“We’re grateful the Commission stopped InterDigital from trying to block our products," Microsoft said. "We’ll continue to pursue our separate suit addressing InterDigital’s unlawful conduct and abusive patent licensing scheme.”

That lawsuit alleges that InterDigital's "abusive licensing practices" violate antitrust law. It comes on the heels of a decision from the 9th Circuit Court of Appeals that upheld a ruling in Microsoft's favor that set a licensing rate for other patents relating to Wi-Fi standards and required Google to pay $14.5 million in damages.

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