A federal judge in Seattle has told Motorola Mobility that he will not grant its request to ban the sale of Microsoft's Xbox 360, and the two need to stop bickering and broker a licensing deal to end their patent suit.

The ruling by Judge James Robart follows a finding by an International Trade Commission administrative law judge that the Xbox has violated four Motorola patents that pertain to the H.264 video compression codec and wireless technologies used in the console and its controllers. The ICT judge recommended in May that sales of the Xbox be banned in the United States.

Not so fast, Robart said. There's no need for that.

"At this stage in the litigation, and based on this court's prior rulings, the court concludes that Motorola cannot demonstrate irreparable harm," Robart said in a ruling issued Friday (.pdf). "The Motorola asserted patents, at issue in this litigation, are standard essential patents of the H.264 Standard and are included in Motorola's H.264 standard essential patent portfolio. Thus, Microsoft is entitled to a license to the Motorola asserted patents on RAND terms."

Robart essentially said the two sides need to sit down and hammer out some fair patent licensing terms – RAND meaning "reasonable and non-discriminatory terms." There really isn't another option since the patents at the heart of the dispute are fundamental to any device using Wi-Fi or playing digital video. But there is disagreement over how much Microsoft should pay up in the inevitable agreement.

Previously, Motorola has proposed a licensing fee of 2.25 percent of the retail price of each Xbox, according to Bloomberg But Microsoft declined, arguing that was too high. Now Robart and the U.S. District Court are tasked with figuring out what a fair licensing fee would be. That won't happen until sometime next year.

Motorola and Microsoft officials were unavailable for comment.