Here's something you don't see every day: A Fortune 100 company and big-name technology business is shifting its distribution operations because of a lawsuit.
According to various news sources, including the Wall Street Journal and Reuters, Microsoft Corp. (Nasdaq: MSFT) is moving its European logistics activities from Germany to the Netherlands as a risk-avoidance measure related to its ongoing legal battle with Motorola Mobility Inc. (NYSE: MMI).
Microsoft says that, even though it would prefer to stay in Germany (an important regional technology center and Europe's largest economy), the risk was too great to stay there. It is reportedly concerned that a court decision expected April 17 on patents could halt sales and distribution of its Xbox gaming consoles and Windows 7 software. To sidestep any potential business fallout from the ruling, the company opted to head across the border, where it's considered safer to warehouse physical goods, because there's less of a chance of facing court-imposed injunctions.
Motorola Mobility, which is being bought by Google, filed a lawsuit accusing Microsoft of infringing on a video technology patent. If the court in Mannheim, Germany, rules in favor of Motorola, Microsoft may be banned from distributing some of its products in the country. That would affect shipments to other countries supplied through the German hub. By moving its shipping base outside Germany, Microsoft is ensuring a court order would not affect deliveries to other parts of Europe.
According to the Financial Times, this is the first time a company has implemented such a workaround to Germany's stringent patent laws, which make it easy for patent holders who believe their rights have been infringed to obtain injunctions.
In the last few years, Germany has been a hotbed of patent disputes involving tablet, smartphone, and software makers. Last year, Samsung Electronics was banned from selling two Galaxy tablet models that allegedly imitated Apple's iPad. In February, Motorola enforced an injunction that briefly compelled Apple to stop selling certain devices. A higher court, citing antitrust issues, later said Motorola couldn't demand that from Apple.