UPDATED 05:01 EDT / APRIL 28 2015

Microsoft could face import ban on phones after losing patent case

gavelThings just got worse for Redmond’s phone hardware business, which reportedly saw a $4 million loss on $1.4 billion revenue in the third quarter of 2015, according to an SEC filing, which shows that Microsoft lost something like 12 cents on every phone sold.

And so it didn’t help matters for Microsoft’s phone business when the company was ruled by a judge, Theodore Essex, with the US International Trade Commission to have infringed a patent owned by wireless research and development company, InterDigital Inc. The judge found that Microsoft had infringed on two patents relating to reducing signal interference on a mobile phone. Reuters reported the judge as stating, “It would not be against the public interest to ban the Microsoft devices from being imported into the United States.” The ITC can ban import on products that it has determined infringe patents, but first the judgment has to be reviewed by the full Commission, which will rule on August 28th.

Prior to Microsoft’s acquisition of Nokia’s handset division Nokia Corp. had been in legal wrangles with InterDigital over patent infringement since 2007, winning a case in the U.S. Court of Appeals after Nokia had originally been cleared of patent infringement. Judge Essex found that InterDigital had not tried to license any technology on unfair terms, and also stated that both Nokia and Microsoft had been found to rebuff paying for licenses that had been offered at reasonable costs.

InterDigital stated that the company was “satisfied” with the ruling. Speaking for the company Lawrence F. Shay, Executive Vice President, Intellectual Property, and Chief Intellectual Property Counsel, said, “We hope it will form the basis for the final determination by the ITC. We also look forward to continued discussion with Nokia and Microsoft Mobile to achieve a license on fair and reasonable terms.”

Microsoft seemed phlegmatic about the case, stating that it looked forward to the full Commission’s review, adding, “We have a successful track record challenging patent assertion entities that misuse industry standards.”

Microsoft might hope for a positive outcome in these testing times for its phone hardware business.

Photo credit: Bloomsberries via photopin cc

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