Microsoft Avoids Import Ban in Patent Dispute, Shares Dive

Strategic Insights -

Microsoft Corp has been dealt a significant victory in its ongoing patent dispute with InterDigital Inc, as the US International Trade Commission declined to block the import of Microsoft's mobile devices. The decision comes as a major relief for the technology giant, which has been struggling to compete with Apple Inc and Samsung Electronics Co Ltd in the smartphone market. Microsoft has captured just 3 percent of the global smartphone market, according to recent estimates.

Key Takeaways:

  • The US International Trade Commission rejected a ruling by a US trade judge that Microsoft had infringed two InterDigital wireless patents, thereby avoiding an import ban.
  • Microsoft had been accused of using InterDigital's patents without paying for a license, which are considered essential to cellphone technology.
  • An import ban would have affected any Microsoft phone using 3G cellular technology, including its Lumia smartphones.
  • Microsoft has been struggling to compete with Apple and Samsung in the smartphone market, capturing just 3 percent of the global market share.
  • InterDigital's Chief Executive Officer William Merritt expressed disappointment over the decision, stating it would have limited impact due to the decline of the Nokia mobile device business under Microsoft's control.
  • Microsoft posted a record quarterly loss last month, taking a $7.5 billion charge on its handset business, which it acquired from Nokia last year.
  • InterDigital stock was down 3 percent after hours on Friday following the news.

Statistics:

  • 3%: The global smartphone market share captured by Microsoft.
  • $7.5 billion: The charge taken by Microsoft on its handset business.
  • 2007: The year InterDigital first accused Nokia of infringing its technology for optimizing a cellphone's power to connect to a network.
  • 3G: The cellular technology affected by the import ban, if implemented.
  • 2015: The year InterDigital and Microsoft were involved in a fierce patent dispute.

Sources:

  • "InterDigital Accuses Microsoft of Patent Infringement" (Global Data Point, 2015)
  • "Microsoft Sued by InterDigital Over Patent Dispute" (Syndigate Media Inc., 2015)
  • "US Trade Judge Rules Microsoft Infringes InterDigital Patents" (Syndigate Media Inc., 2015)