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Much like with HTC, U.S. Customs may decide to freeze shipments, with no guarantees of an expedient review

In June 2011, DailyTech carried a column entitled "Can Microsoft and Apple Kill Google's Android with Lawsuits?"

I. Motorola -- Next on the Banned List

Was the title a provocative one?  Surely, it was.

But it also sounds strangely prophetic, as news [PDF] has just arrived that a second member of the "elite three" of top Android manufacturers has been picked off.

This time the ban -- set in place by the U.S. International Trade Commission and scheduled to be enforced by U.S. Customs in 60 days -- is on Motorola Mobility Inc.'s (MMI) handsets and comes courtesy of Microsoft Corp. (MSFT).  The new ban from the U.S. International Trade Commission comes just weeks after U.S. Customs began to enforce a punitive and sweeping ban on imports of HTC Corp. (TPE:2498) Android handsets, sending the phonemaker's shares plunging.

After being slapped with an unfavorable preliminary ruling late last year, the official ruling found that Motorola infringed on one patent -- U.S. Patent No. 6,370,566 -- which covers scheduling meetings.

Motorola
Here's the feature that led to the ban. [Image Source: Microsoft via Engadget]

Much like the ruling against HTC this is a seemingly trivial item; one that Motorola and Android operating system developer Google Inc. (GOOG) could easily work around.  The big question is whether a workaround will do anything to prevent a ban.

After all, HTC removed all infringing features from its phones months ago, but U.S. Customs inexplicably opted to seize all its products anyways.  A month has gone by with no indication from customs when they are going to bother to review the handset shipments to confirm that the infringing features are gone, allowing them to be released to market.

II. ITC Warns That Bans are the Realm of Customs, Carry Little Guarantees

DailyTech has been in contact with an spokesperson for the U.S. International Trade Commission who placed the exclusion order (preliminary injunction).  The ITC says the bizarre delay is the responsibility of U.S. Customs and is out of its hands, writing:

Please be aware that it is Customs, not the ITC, which enforces the exclusion orders and inspects shipments at the border.
...
[T]he USITC is not involved in the Customs process.  That said, you should know that under USITC rules, HTC can file at the USITC for a ruling on its modified devices.  It has not done so.  But be aware that obtaining such a ruling would constitute another formal proceeding, and not necessarily a rapid proceeding.

Motorola released an understandably grim statement on the ITC exclusion order, commenting:

Microsoft started its ITC investigation asserting 9 patents against Motorola Mobility. Although we are disappointed by the Commission's ruling that certain Motorola Mobility products violated one patent, we look forward to reading the full opinion to understand its reasoning. Motorola Mobility will not experience any impact in the near term, as the Commission's ruling is subject to a $0.33/per unit bond during the 60 day Presidential review period. We will explore all options including appeal.

Droid RAZR MAXX
Motorola is fighting the ban on its handsets, much like HTC. [Image Source: Verizon Wireless]

Microsoft released a respectively gleeful statement from its deputy general counsel David Howard, who writes:

Microsoft sued Motorola in the ITC only after Motorola chose to refuse Microsoft's efforts to renew a patent license for well over a year. We're pleased the full Commission agreed that Motorola has infringed Microsoft's intellectual property, and we hope that now Motorola will be willing to join the vast majority of Android device makers selling phones in the US by taking a license to our patents.

With HTC's products seized indefinitely by U.S. Customs' arbitrary enforcers, one has to wonder how many months will go by once the Motorola ban takes effect before Customs bothers to check if Motorola has changed its product.

III. Could Samsung be the Last of the Android Rebels?

It's quite possible that within a couple months there could be only one major Android handset manufacturer on the U.S. market -- Samsung Electronics Comp., Ltd. (KSC:005930).

Samsung building
Samsung could soon be the only Android phonemaker not banned in the U.S. 
[Image Source: Flickr]

Much like HTC, Motorola is in a precarious financial position.  Google was supposed to acquire Motorola Mobility and relieve its short term financial misfortune.  But China has held up the acquisition process, leaving the company on its own for now.

But if Motorola Mobility is going down based on the financial fallout of an import ban, it can lease do more damage to Microsoft than HTC could to Apple.  Unlike HTC, Motorola is a large company with many patents.  Using those patents, Motorola secured an injunction in Germany banning the sale of Windows and the Xbox 360.

A U.S. federal court ruled that it was illegal to enforce that injunction, threatening Motorola with huge fines.  But if Motorola feels in danger of going bankrupt, it may call the court's bluff and use its "nuclear option" in Germany.

Thus Microsoft may join Apple in successfully removing another major competitor from the market, but if it succeeds it will pay a much dearer cost.  

Of course, it's possible that pressure from Google and others could push U.S. Customs to avoid repeating the punitive ban on HTC's products with Motorola.  U.S. Customs could face steeper criticism in contributing to Motorola's device due to lack of an expedient review, given that Motorola is an American company (unlike HTC) and it would be costing American jobs.  

Ultimately, the best possible outcome for the Android alliance is for U.S. Customs to review the devices and impose no ban -- but there's no assurances that will happen.  In short, this is a dark day for the Android rebellion, but whether their movement has truly been crushed by the Microsoft and Apple empires is yet to be seen.

Sources: ITC, Microsoft; Motorola comments [via Engadget]





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