Amidst patent disputes with mobile giant Motorola, Microsoft has decided to relocate its software distribution centre from Germany to the Netherlands, fearing the lawsuit could affect its European business.

Microsoft declared the relocation news on Monday, saying it is in the process of moving its European logistics operation to the Netherlands. The Microsoft’s move has led to dissolving of its distribution deal with Bertelsmann subsidiary Arvato.

“We have a great relationship with Arvato, and we are pleased with the quality of their service. But Motorola’s refusal to live up to its patent promises has left us no choice. We would have preferred to keep our European distribution centre with Arvato in Germany as it has been for many years, but unfortunately the risk of disruption from Motorola’s patent litigation is simply too high”, explained Microsoft.

Microsoft in Germany has been sued by Motorola over H.264 video compression technology. Motorola has also accused Microsoft of using its patents in Windows 7, the Xbox gaming console, Internet Explorer 7 and Windows Media Player without permission.

The Microsoft’s decision comes as the European Commission (EC) has confirmed that it has started two anti-trust investigations into Motorola after a complaint that Microsoft made to EC. In the complaint, Microsoft said that the patents in question is essential to the H.264 standard and should be licensed out on fair, reasonable and non-discriminatory (FRAND) terms.

According to the software maker, Motorola wished a royalty payment of $22.50 for the 50 video patents. Meanwhile, Motorola is insisting to reach licence agreements with all firms to use industry standard patents.