Microsoft v Motorola (9th Cir., No. 14-35393, 2015)

Dhenne Avocats · 11 October 2026

Our analysis

Summary

The Ninth Circuit affirmed the judgment ordering Motorola to pay Microsoft USD 14.52m for breach of its RAND commitments to the ITU and the IEEE (pp. 2, 15, 16 and 64). The jury was entitled to find that Motorola’s injunction actions on standard essential patents breached the duty of good faith attached to those commitments, and the fees incurred in defending them were recoverable as contract damages (pp. 43 and 54).

The opinion treats the RAND commitment as a contract enforceable by the implementer as a third-party beneficiary, and upholds a judicial method for setting a RAND rate based on an adapted hypothetical negotiation.

Facts and procedure

Motorola held portfolios essential to the H.264 (ITU) and 802.11 (IEEE) standards, subject to RAND commitments (pp. 10 and 11). In October 2010 it offered Microsoft a licence at 2.25% of the price of the end product, whether an Xbox or a Windows computer, open for twenty days (pp. 11 and 12). Microsoft sued for breach of those commitments; Motorola sought injunctions in Wisconsin, before the ITC and in Germany, which led Microsoft to move its European distribution centre to the Netherlands (pp. 12 and 13). An anti-suit injunction against enforcement of a German injunction was affirmed in 2012 (p. 13). After a bench trial, Judge Robart set the RAND rate at 0.555 cents per unit for H.264 and 3.71 cents for 802.11 (p. 15). The jury awarded USD 11.49m in relocation costs and USD 3.03m in attorneys’ fees and litigation costs (pp. 15 and 16).

The applicable law

The dispute is governed by Washington contract law: the RAND commitment is a contract between the patent holder and the standard-setting organisation, enforceable by the standard implementer as a third-party beneficiary, and it carries an implied duty of good faith and fair dealing (pp. 7 and 14). The claim sounds in contract and does not arise under patent law, which grounds the Ninth Circuit’s jurisdiction (pp. 17 to 23).

Question

Could the judge set the RAND rate himself ahead of the jury trial, could seeking injunctions amount to a breach of the RAND commitment, and are the costs of defending those actions recoverable?

Decision

Motorola had consented to a bench trial on the RAND rate and could not challenge it (pp. 24 to 28). On the merits, Federal Circuit damages law does not bind a contract action but may guide the valuation (p. 29). The judge was entitled to construct a hypothetical negotiation between patent holder and implementer and to adapt the Georgia-Pacific factors, which are no talisman, including the date of the negotiation (pp. 29 to 34). He could treat the MPEG LA pool rates as a reliable indicator, multiply pool rates by three to reflect the other benefits of pool membership, and discount Motorola’s past licences, which settled litigation or covered broader portfolios (pp. 35 to 38).

The jury had been told that seeking an injunction is not a per se breach of the RAND commitment (p. 40). It could infer bad faith from rates far above the RAND rate, from the timing of the actions, filed as soon as the twenty-day window closed and after Microsoft had sued, from the absence of irreparable harm for a patent holder fully compensated at the RAND rate, and from the maintenance of the actions despite the FTC investigation (pp. 41 to 43). A RAND commitment does not always preclude an injunction, for instance against an infringer that refuses a RAND offer (p. 47, n. 19).

The Noerr-Pennington doctrine does not protect the breach of a contractual commitment not to sue (pp. 44 to 47). Fees incurred in the injunction actions are consequential damages akin to mitigation, and awarding them serves the aim of encouraging adoption of the standard (pp. 48 to 54).

Key points for practice

• A standard implementer may enforce the RAND commitment as a third-party beneficiary before the contract court (pp. 7 and 14).
• Licences concluded under threat of litigation or as part of a wider deal may be rejected as comparables (pp. 36 to 38).
• A patent holder that sues for an injunction straight after an offer far above the RAND rate risks a finding of bad faith (pp. 41 and 42).
• Practical point: beyond losing the injunction, the patent holder may have to bear the implementer’s defence costs and the reorganisation costs its actions caused (pp. 15, 16 and 54).

Provisions applied

National law

Washington contract law (duty of good faith and fair dealing); Wash. Rev. Code § 4.24.350; 28 U.S.C. §§ 1292(c)(1), 1295 and 1338(a); Patent Act, § 284; 15 U.S.C. § 45; Federal Rules of Civil Procedure 42(a), 50(a), 52(a)(1) and 54(b); Federal Rules of Evidence 401, 403, 408 and 801; US Constitution, First and Seventh Amendments

Other texts

Common Patent Policy for ITU-T/ITU-R/ISO/IEC; RAND commitments to the IEEE

Case law cited

Microsoft v Motorola, 696 F.3d 872 (9th Cir. 2012); Ericsson v D-Link, 773 F.3d 1201 (Fed. Cir. 2014); Apple v Motorola, 757 F.3d 1286 (Fed. Cir. 2014); Georgia-Pacific v U.S. Plywood, 318 F. Supp. 1116 (S.D.N.Y. 1970); Christianson v Colt Industries, 486 U.S. 800 (1988); Bonzel v Pfizer, 439 F.3d 1358 (Fed. Cir. 2006); Apple v Motorola Mobility, 886 F. Supp. 2d 1061 (W.D. Wis. 2012); Realtek v LSI, 946 F. Supp. 2d 998 (N.D. Cal. 2013); Noerr, 365 U.S. 127 (1961); Pennington, 381 U.S. 657 (1965); Dutrisac v Caterpillar, 749 F.2d 1270 (9th Cir. 1983); Gruver v Midas, 925 F.2d 280 (9th Cir. 1991); Olympic S.S. Co. v Centennial Ins. Co., 811 P.2d 673 (Wash. 1991)

Related decisions

• Ericsson v D-Link, Federal Circuit, 4 December 2014, followed on adapting the Georgia-Pacific factors to the RAND context (pp. 31 and 38).

Prepared by Dhenne Avocats from the text of the decision (Ninth Circuit website, published opinion), consulted on 11 October 2026. Only the official text is authoritative.