A US judge has rejected Motorola's attempt to have the Xbox banned from sale in the US and Germany.

Motorola, owned by Google, has been embroiled in a nasty patent dispute with Microsoft that had threatened to halt the sale of the Xbox 360 in the US.

The patents at the heart of the dispute revolve around how the Xbox 360 decodes video content. Motorola claims ownership on the tech powering this and wants Microsoft to pay up to £2.5bn in royalties.

Back in June Motorola asked for a royalty of 2.25 per cent on each Xbox and 50 cents per copy of Windows for using its patents as part of a settlement. Microsoft refused.

This came after Judge David Shaw told the International Trade Commission that it should use a cease and desist order to ban imports of the Xbox 360 Slim 4GB and 250GB models into the US because, in his view, they infringed on four patents owned by Motorola.

He also wanted Microsoft to post a bond equal to seven per cent of the value of unsold Xbox 360s in the US.

Now, Motorola's case has been rejected as part of the overall patent trial. Judge James Robart said the patents in question were Frand-type innovations and therefore critical to industry standards. They should be licensed on fair, reasonable and non-discriminatory terms, he said.

The outstanding amount owed could be added to Microsoft's bill once the matter is resolved.

The case continues.