Microsoft has lost the first round in a patent battle that could see its handsets banned from import into the US. InterDigital has received a Notice of the Initial Determination On Remand by the Administrative Law Judge ("ALJ") in U.S. International Trade Commission (ITC) investigation No. 337-TA-613 in which the ALJ finds that the company has prevailed in its complaint against respondents Nokia and Microsoft Mobile.

The Notice states that the ALJ's initial determination found that Nokia and Microsoft Mobile products infringe two InterDigital patents, that there is no evidence that InterDigital has engaged in "patent hold-up", and that Nokia and Microsoft Mobile's claims that InterDigital's FRAND commitments preclude relief do not have merit. It also held that there is evidence of "reverse patent hold-up" by one or more of the Nokia and Microsoft Mobile respondents in the case. "Reverse patent hold-up" generally refers to implementing standards-based technology without being genuinely willing to obtain and pay for a license on FRAND terms and conditions to the owner of patents related to that technology.

"We're obviously very satisfied with today's ruling, which underscores the strength of InterDigital's portfolio and our long track record of developing and licensing some of the core wireless technologies that have helped drive the growth of our industry," said Lawrence F. Shay, Executive Vice President, Intellectual Property, and Chief Intellectual Property Counsel. "We hope it will form the basis for the final determination by the ITC. We also look forward to continued discussion with Nokia and Microsoft Mobile to achieve a license on fair and reasonable terms."

Microsoft said that it would challenge the decision.

"This is one step in the process and we look forward to the full Commission's thorough review," Microsoft said in a statement."We have a successful track record challenging patent assertion entities that misuse industry standards."

In the 613 Investigation, first filed in 2007, InterDigital seeks an exclusion order prohibiting the importation into the United States of Nokia and Microsoft Mobile devices with 3G WCDMA capabilities that infringe two InterDigital patents. In 2013, the 613 Investigation was remanded to the ITC from the U.S. Court of Appeals for the Federal Circuit, which held that the Commission had erred in interpreting certain claim terms in InterDigital's patents. Those erroneous interpretations, which led to the Commission's finding of no infringement and therefore no violation as to the two patents that were the subject of the appeal, were reversed. The ITC's Final Determination in the investigation is currently expected by August 28, 2015.