US trade judge rules against Microsoft in phone patents case

The full U.S. International Trade Commission is now set to review the decision

Microsoft has lost the latest round in a patent-infringement case that could lead to an import ban on its phones.

Administrative Law Judge Theodore Essex of the U.S. International Trade Commission ruled on Monday that Nokia and Microsoft Mobile products infringed two patents held by R&D company InterDigital. Essex's decision is preliminary and will be reviewed by the full commission, which is expected to announce its final ruling on Aug. 28. The final ruling could lead to a ban on importing the phones into the U.S.

The ruling covers most of Microsoft's mobile phones, according to InterDigital spokesman Patrick Van de Wille. Microsoft acquired Nokia's devices business last year. The patents in the case cover technologies involved in powering up a phone and having it connect to 3G wireless networks. Even though most current cellphones use 4G LTE, they still have 3G capability for use where 4G isn't available.

Companies with patented technology that's included in standards typically have to license it on terms that are considered fair, reasonable and non-discriminatory. Judge Essex found no sign that InterDigital tried to license its technology on unfair terms, and he did find evidence that Nokia and Microsoft weren't willing to pay for a license that was offered on reasonable terms, InterDigital said.

Microsoft downplayed the significance of the preliminary decision.

"This is one step in the process and we look forward to the full Commission's thorough review," the company said in a statement. "We have a successful track record challenging patent assertion entities that misuse industry standards."

InterDigital filed the case in 2007 and lost at the ITC the first time the case was heard there, but it won an appeal in federal court. That appeals court then sent the dispute back to the ITC, where it's being heard now.

InterDigital develops technologies that are incorporated into standards and employs about 200 engineers, Van de Wille said. It has been involved in patent disputes with several large mobile vendors, including Samsung Electronics, Huawei Technologies and ZTE in addition to Nokia and Microsoft.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

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