This doesn't look good for Motorola in any way shape or form. Microsoft has denied a settlement offer from Motorola regarding a lawsuit from Motorola, alleging that the Xbox 360 infringes on no fewer than five of its patents.
It's part of a large legal standoff between the two companies, as Microsoft is also accusing Motorola of infringing on its patents with its Android phone lineup.
The fact that Motorola was willing to make a settlement offer doesn't necessarily prove that it won't win if this case goes to trial, but obviously it isn't a good sign.
Motorola had offered Microsoft a flat rate fee of 33 cents for every Android phone that uses technology from its patents, but only if Microsoft gave in return a 2.25% royalty fee on every Xbox 360 sold.
"While we welcome any good faith settlement effort, it's hard to apply that label to a demand that Microsoft pay royalties to Google far in excess of market rates, that refuses to license all the Microsoft patents infringed by Motorola, and that is promptly leaked to the press," Microsoft deputy general counsel Horacio Gutierrez said in an email to Reuters.
Without some sort of settlement between the two companies, Microsoft does face the risk of Motorola asking a judge to ban imports of Xbox 360 hardware into the US.
So the company can't just sit around and do nothing. Negotiations are no doubt set to continue today as the two corporate giants hope to hammer out a plan sooner rather than later.