SAN FRANCISCO A U.S. appeals court ruled on Friday that Google's Motorola Mobility unit cannot enforce a patent injunction that it obtained against Microsoft Corp in Germany.
The injunction would bar Microsoft from "offering, marketing, using or importing or possessing" in Germany some products including the Xbox 360 and certain Windows software.
The ruling against the German injunction came from the 9th U.S. Circuit Court of Appeals in San Francisco.
Representatives for both companies could not immediately be reached for comment.
The current Xbox 360 is the market-leading console in the United States. Microsoft is expected to unveil its next generation Xbox video game console in 2013.
Microsoft has said that Motorola's patents are standard, essential parts of its software and that Motorola is asking far too much in royalties for their use.
Microsoft sued Motorola in the United States in 2010, and Motorola then filed a lawsuit in Germany. In April, a federal judge in Seattle granted Microsoft's request for a temporary restraining order against Motorola in Germany.
In its ruling on Friday, a three-judge 9th Circuit unanimously upheld the lower court order. Since Microsoft had already brought a lawsuit against Motorola for breach of contract in the United States, U.S. courts have the power to put the German injunction on hold, the 9th Circuit said.
"At bottom, this case is a private dispute under Washington state contract law between two U.S. corporations," the court ruled.
European regulators are investigating claims that Motorola over-charged Microsoft and Apple Inc for use of its patents in their products and thereby breached antitrust rules.
(Reporting by Dan Levine; Editing by Gary Hill)