Microsoft Reverses Position on Patents

Microsoft (NASDAQ:MSFT) has agreed to license patents to other companies when the product in question involves an industry-standard patent. Dave Heiner, who is in charge of Microsoft’s corporate standards and antitrust unit, stated yesterday, “Patent holders should not seek to block shipments of competing products just because they implement an industry standard — a license on reasonable terms is always available.”

This policy marks an abrupt change from Microsoft’s policy on patents from last year. In a document given to the U.S. Trade Commission last June, Microsoft argued that even if they made a licensing commitment, that should not preclude the company from being able to seek legal recourse if another company is using that product as part of an industry standard.

This change in heart is a direct consequence of Google’s change in policy on this very same issue. Google’s about-face came about because it is seeking to buy out Motorola Mobility (NYSE:MMI), and Google’s (NASDAQ:GOOG) shift on industry-standard policy makes the merger more likely to occur. Google was given approval by both the U.S. Department of Justice and the EU earlier in the day.

Motorola Mobility has accused both Microsoft and Apple (NASDAQ:AAPL) of using their patents. Google’s change in policy is less pronounced than Microsoft’s, as it is seeking a 2.25% fee from other companies using their technology and made a statement that welcomed negotiation on these issues as opposed to legal action. Microsoft actually has relatively few patents that fall under the industry-standard paradigm.

Here’s how these stocks are trading now:

Microsoft Corporation (NASDAQ:MSFT): MSFT shares recently traded at $31.38, up $1.33, or 4.43%. They have traded in a 52-week range of $23.65 to $30.80. Volume today was 88,846,921 shares versus a 3-month average volume of 54,823,400 shares. The company’s trailing P/E is 11.34, while trailing earnings are $2.76 per share.

Motorola, Inc. (NYSE:MMI): MMI shares recently traded at $39.71, up $0.01, or 0.03%. They have traded in a 52-week range of $20.77 to $39.72. Volume today was 7,119,299 shares versus a 3-month average volume of 4,603,100 shares. The company’s trailing earnings are $-0.84 per share.

Google Inc. (NASDAQ:GOOG): GOOG shares recently traded at $607.03, up $1.47, or 0.24%. They have traded in a 52-week range of $473.02 to $670.25. Volume today was 2,391,625 shares versus a 3-month average volume of 2,928,710 shares. The company’s trailing P/E is 20.35, while trailing earnings are $29.76 per share.

Apple Inc. (NASDAQ:AAPL): AAPL shares recently traded at $502.55, up $4.88, or 0.98%. They have traded in a 52-week range of $310.50 to $526.29. Volume today was 32,510,067 shares versus a 3-month average volume of 13,104,600 shares. The company’s trailing P/E is 14.32, while trailing earnings are $35.14 per share.

To contact the reporter on this story: Alex Capel at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com