Google-owned Motorola will not be able to enforce a German court injunction banning the sale of Xbox 360 and Microsoft software.
A three-judge panel in San Francisco upheld an earlier order by a Seattle judge that prevents Motorola from enacting the ban on Microsoft product sales.
The lower court's order was narrowly tailored said the three-member panel, Bloomberg reported.
Both the companies are involved in a court battles in the U.S. and Germany. Microsoft accuses Motorola of using its technology and seeks royalties. Motorola in turn says that Microsoft owes it royalties for using Wi-Fi and video compression technology in Xbox.
It was in May that Motorola won an injunction in Germany banning the sale of several Microsoft products.
This ruling came from the 9th U.S. Circuit Court of Appeals in San Francisco, Reuters reported.
While Microsoft was "pleased with the ruling," Motorola, which is owned by Google declined to comment, Reuters reported.
"To some extent Germany has a reputation as place you can go and get an injunction relatively easy," Brian Love, law professor at Silicon Valley told Reuters.
Motorola has to deposit a security bond that will cover the potential damages to Microsoft in order to enforce German sales ban, the court said.
If Microsoft wants to avoid the injunction it can enter into an agreement over the licenses with Motorola and fix a rate to determine the payable royalty.
"We're pleased that Judge Robart's decision has been affirmed by the Ninth Circuit Court of Appeals, preventing Motorola from enforcing an injunction in Germany until its use of standard essential patents can be closely examined," David Howard, corporate vice president and deputy general counsel for Microsoft said to Bloomberg.
Motorola is being investigated by European regulators if it overcharged Apple and Microsoft for the use of its patents in their products, causing breach in anti-trust rules.
