Microsoft has rejected an offer from Motorola to settle the patent battle between the two companies.
According to Microsoft, as quoted by Reuters, Motorola offered a $0.33 (21p) royalty for each Motorola Android phone that uses Microsoft's ActiveSync technology — the patent for which is at the heart of the US dispute.
However, Motorola apparently also asked Microsoft to pay it $0.50 for each copy of Windows, and a 2.25 percent royalty on every Xbox sold. Those products use Motorola's H.264 video technology.
"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.
The amount Motorola wants for the use of its patents is central to an EU antitrust investigation into the company, which followed complaints from Microsoft and Apple.
When patents are essential to widely-used standards, as is the case with Motorola's video patents, they are supposed to be licensed to others on 'fair, reasonable and non-discriminatory' (FRAND) terms. Microsoft and Apple say the 2.25 percent royalty rate demanded by Motorola and its owner Google is excessive.
The companies also say Motorola and fellow Android manufacturer Samsung — also the subject of an EU antitrust probe — should not be allowed to use FRAND-protected patents as legal weapons.
EU competition commissioner Joaquín Almunia said last Friday that the tech industry should tighten up its FRAND rules, as consumers are being "held hostage to litigation".