Microsoft Moves European Distribution Centre out of Germany

Microsoft is moving its European distribution centre out of Germany and into The Netherlands as it awaits the outcome of litigation with Motorola Mobility relating to patents for the H.264 video codec.

The court in Mannheim is expected to deliver its judgment on 17 April and a ruling in favour of Motorola Mobility could lead it obtaining a preliminary injunction against Microsoft. This could potentially affect the ability of the Redmond giant to sell its Windows operating system and Xbox 360 console in Germany, in addition to software such as Windows Media Player and Internet Explorer.

Microsoft has also asked a US court to prevent Motorola Mobility enforcing such a judgment, should it be awarded by the Mannheim court. The parties are also engaged in patent litigation before a court in Washington, with Microsoft keen to reach a worldwide licensing deal with Motorola, thereby preventing any disruption to the distribution of its products in European markets. Both disputes concern standards-essential patents, also known as FRAND patents, as they must be licensed on Fair, Reasonable And Non-Discriminatory terms.

Motorola Mobility would be unable to enforce such a ban without posting a significant bond which would become payable to Microsoft, should it succeed on appeal. It is therefore likely to wait until the appeals process has been exhausted before attempting to enforce any such injunction. Microsoft has also offered to post a bond of $300m to the Washington court in respect of lost licensing fees for Motorola Mobility if it does not get to enforce its injunction and later wins in court.

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