Not everything inside the Xbox 360 was designed by Microsoft; the console's wi-fi capabilities and some its video codecs are licensed from Motorola. And are now the subject of a court battle between the two companies.

A suit has been filed in a Federal Court in Seattle by Microsoft, alleging Motorola "broke its promise" in regards to patent licensing by charging "royalties that are excessive and discriminatory" for the technology included in the Xbox 360.

In other words, that Motorola charged Microsoft a lot more for the licensing than they have other companies.

The specific tech in question is related to the Xbox 360's ability to connect to a network wirelessly over WLAN, as well as its ability to display videos running in the H.264/MPEG-4 AVC codec.

Microsoft is asking the courts to determine a more reasonable royalty rate for the use of the technology, along with compensation for Motorola's alleged breach of contract.

http://kotaku.com/5686042/microsoft-suing-motorola-over-xbox-360-tech

So basically Motorola charged MS a lot more because MS is a massive billion dollar company compared to the the other companies that they licensed this tech to?

I can't believe someone is being sued over a WLAN feature.

I can't.

Just like the comments on Kotaku:

...so Microsoft is mad that they were charged too much for proprietary hardware? *looks at Xbox HDD/wireless dongle/etc.*

The con man has been conned....

Microsoft has been down this path before the Nvidia and the original Xbox. That debacle made it so that Microsoft never had a chance to sell the Xbox at a profit, because the deal with Nvidia said that the cost of the graphics chip would never change over the lifetime of the Xbox.

I think Microsoft is just trying to protect itself from the same thing happening again.

Well if the contract stipulates the royalties as being the market rate then they have a case. If the contract stipulates an actual value of the royalty I don't see them getting very far.

I'd love to see the amount MS spend on lawyers and court costs every year. They are like in court every other week.

So MS made a bad decision and paid too much and now they want a court to get them money back?  huh??

Motorola made a "promise"? Seriously, aren't those things decided in written form and approved by both sides?

Yeah and that is why there is a court case.