Microsoft phones face US import ban over patent issue

Microsoft has lost the first round in a patent battle that could see its handsets banned from import into the US.

The country's International Trade Commission (ITC) has ruled that it used technology developed by InterDigital without permission.

Microsoft said that it would challenge the decision.

The judge's findings will be subject to a review before any import ban comes into force.

"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."

Judge Theodore Essex ruled that Microsoft infringed two wireless cellular patents which relate to technology that powers up phones and connects them to 3G networks without interference.

The ruling would cover the majority of its handsets which are manufactured outside the US.

The next step will be a review by the ITC with a decision expected by late August.

In response, InterDigital said it would have "continued discussion" with Microsoft to license its patents.

It has also been involved in patent disputes with several large mobile vendors including Samsung and Huawei.

It first accused Nokia of infringing its patents in 2007. It lost that case but won an appeal in federal court.

Microsoft acquired Nokia's handset division last year but it is struggling to make its phone business profitable.

According to its latest quarterly earnings report its hardware division lost $4m (£2.6m) on revenues of $1.4bn.