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Recently, Motorola Mobility Inc. (MMI) received a favorable ruling from the International Trade Commission (ITC) relating to a patent infringement case against Microsoft Corp. (MSFT - Analyst Report). The ITC ruled that Motorola did not violate six of the seven alleged patent rights of Microsoft.

Earlier in October 2010, Microsoft had filed a lawsuit against Motorola alleging wrong usage of its nine patented technologies. However, Microsoft withdrew two patents from the alleged nine during the court proceedings.

Microsoft's patented technology allows mobile handset users to schedule conferences on handsets. Microsoft complained that Motorola breached this technology and integrated it on their Android-based smartphones.

In response to Microsoft's litigation, Motorola countersued Microsoft for infringing at least 25 of its patents. Motorola claimed that Microsoft has violated their patents on different technologies including the popular Xbox 360 and the Windows Phone 7 operating system. The case is under review at the ITC and the decision is expected in spring 2012.

Recently, Motorola Mobility also received another favorable ruling from the court in Manheim, Germany regarding infringement of its GPRS technology by Apple Inc. (AAPL - Analyst Report).

Presently, Motorola Mobility holds rights for approximately 24,000 patents, which places it in an advantageous position as the mobile handset manufacturers like Apple, Samsung and HTC continue to accuse each other of patent infringements.

However, we believe that the company's recent merger plans with Google Inc. will spurt apprehension in the smartphone market as most handset manufacturers use Google's popular Android operating system in their smartphones.

We, thus, maintain our long-term Neutral recommendation on Motorola Mobility Holdings Inc. Currently, Motorola Mobility Holdings Inc. has a Zacks#3 Rank, implying a short-term Hold rating on the stock.

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