Microsoft and Motorola have been in the midst of a dispute tied to the slim models of the Xbox 360 as well as Windows 7, their media player and Internet Explorer. According to the case, Microsoft has infringed on the company's ActiveSync patent. Motorola offered a deal in which Microsoft would pay them a 2.25% royalty on Xbox 360 sales plus 5 cents for every copy of Windows they sell.
Microsoft said something to the effect of 'no thank you,' so now it will go to the higher ups.
A couple of months ago, the courts ruled that Microsoft should pay a 7% bond on the value of unsold Xbox 360s in the US. In addition, the judge ruled that if Microsoft fails to agree to the settlement, the sale of the console should be banned.
Since it appears it will likely come to that, it's important to not that there's a 60-day period in which President Obama can overturn the ruling. Something tells me he's got more important things on his plate than settling patent disputes.