New York, August 29

Microsoft Corp avoided a potentially costly setback to its mobile phone business on Friday as the US International Trade Commission declined to block the import of its devices in a long-standing patent dispute.

The decision rejected a ruling in April by a US trade judge who found that Microsoft had infringed two InterDigital Inc wireless patents, and recommended an import ban.

The commission’s action is good news for Microsoft, which has been struggling to compete with Apple Inc and Samsung Electronics Co Ltd devices. The Redmond, Washington-based company has captured just three per cent of the smartphone market in the United States and globally, according to recent estimates.

Microsoft last month posted a record quarterly loss as it took a $7.5 billion charge on its handset business, which it bought from Nokia last year.

InterDigital’s Chief Executive Officer William Merritt said in a statement that the decision was disappointing but would have limited impact ‘given the decline of the Nokia mobile device business under Microsoft’s control and its limited market position’.

A Microsoft spokesperson said the company was ‘grateful the Commission stopped InterDigital from trying to block our products’. The two companies are at odds over how much InterDigital should be able to charge to licence its patents, which are considered essential to cellphone technology.

Wilmington, Delaware-based InterDigital first accused Nokia in 2007 of infringing its technology for optimising a cellphone’s power to connect to a network. In April, the US trade judge ruled that Microsoft used InterDigital’s patents, considered standard in the industry, but refused to pay for a licence to them. An import ban would have affected any Microsoft phone using 3G cellular technology, including its Lumia smartphones.

After reviewing that ruling, the commission said on Friday that Microsoft did not violate the patents.