U.S. Judge Upholds Import Ban on Xbox 360 Slim

Last month, Motorola won a case in the German court system against Microsoft for violating a series of Motorola patents regarding wireless technology and video decoding. The German court system ruled in favor of Motorola by determining Microsoft was in violation of 4 out of 5 patent infringements brought in front of them by Motorola. A Seattle-based judge, operating out of the same circuit in which Microsoft has their headquarters, quickly went into action and blocked the German court's ruling until a final decision could be rendered by the ITC (International Trade Commission).

Oh, right, that initial ruling? Microsoft would face a ban on the import sales of all Xbox 360 4 GB and 250 GB Slim models unless they paid Motorola a 7% license fee, retroactive for all unsold models that violate the Motorola patents. At the moment, there has been no further discussion on the issues with other Microsoft technology, specifically Internet Explorer or Windows continuing to be sold, which is perhaps the only silver lining in this ruling for Microsoft. Microsoft spent the past month in court arguing in front of Judge David Shaw of the ITC that the initial bond sought by Motorola of 100% was unreasonable and argued to pay Motorola a 2.5% bond on all Xbox 360's found to violate the patents. Judge David Shaw reinforced the 7.5% bond ruling and this will pass into effect within the next 60 days.

Judge David Shaw's decision explicitly states that protecting intellectual rights is more important than providing choices for the consumer and he believes that there is no evidence Sony and Nintendo can not step in and fill the consumer demand in lieu of Microsoft providing the market with new Xbox 360's.

At this moment, the only hope Microsoft has to avoid a ban on the sale of new Xbox 360's is direct action by President Barack Obama. President Obama, as is standard in all cases such as this, has 60 days to review the decision. If the sitting President decides against the ruling of Judge David Shaw, then the case will be heard in the Court of Appeals of the U.S. Federal Court.

Section 337 of the Tariff Act allows administrative judges to investigate allegations of intellectual property infringement against goods imported into the United States. The actual Xbox 360 devices were originally assembled in Germany, which is why a German court decision has such ramifications within the United States. Other territories, such as the United Kingdom and Canada, will eventually also have to deal with the German court decision once the issue is finally settled sometime in August.