Motorola initially offered Microsoft a license for their patents but Microsoft refused. I can't say I'm surprised by this.
Welcome to the enviable conclusion of the software patent wars. All software becomes illegal.
Motorola's "offer" was a 4 billion dollar per year license fee for their 50 H.264 patents, which is roughly 1.2 million times more than what Microsoft pays for each of the other 2300 H.264 patents. Motorola's "offer" was bull.