I agree with the comments that it's more of an issue to do with the various record label rights holders. They still want to segement markets and charge what the market will bear in each market.
In various ways this is illegal among the wave of free trade agreements that have been signed in many of these markets (Australia is one) but given this took many years to get sorted out with CD's and the like (remember the region codes locking media to players) I don't expect anything to happen soon.
I think to look at the Xbox as a games console alone is a mistake. Microsoft - like Apple - can leverage their existing enterprises onto the emerging media/Internet/Phone/Video/Advertising convergence. The Xbox as a wireles media centre and hub for various on-line services is a model that may position them to far greater riches than worrying about recovering the cost of a box!
Just think of the identity management side alone and see the leverage there. Because it's already connected to your home theatre or whatever this is a far better fit to the consumer market than any PC alternative. A door to every lounge room - you don't have to think too hard about what this will be worth to any company!
Like the phone company's give away the hardware and make money from the services.
A couple of points.
1. Surely standards bodies should do their own patent searches to ensure that any technology they are ratifying is clear of someone else's patents. The patent databases are well published these days so it's not a difficult task and given what is at stake you'd think it must be done.
2. In the case of companys getting provisional patents either during or slightly before these standards are published I would think these patents would not usually be awarded since there is clear evidence of 'prior art'. ie the standards body would have a claim to much of this work as well.
3. Some of your examples are a bit unfair because these technolgies were developed well before they were either adopted as a standard or became commercially sucessfull. One topical one at the moment is some of the WiFi stuff that was developed (and patented) by CSIRO years before it found commercial success. Clearly there must be some integrity in the patent system to ensure inventors of technology can be rewarded for their efforts.
Well if the patent dates back to the late 80's and patents last for 20 years or so then in 2010 the patents run out do they not?
So by the time this is sorted out in court MS and others will be free to use them so I think it's a bit of a storm ina tea cup and as someone has pointed out the lawyers are just making a meal of this for themselves.
In anycase it won' t take too much tweaking of codecs to avoid infringments I would think if they haven't done that already.
If they are not careful you will find that the
trademark will become what is called diluted or fall into generic use, losing its protected status.
For example the word iPhone could follow the lead of what were once trademarks such as "escalator", "xray" and "zipper" that became generic.
Also in my opinion the practise of putting an 'i' (for Internet) or an 'e' (for electronic) in front of a word is not making a product 'distinct from others' as is required to be considerd a TM. This process itself has become generic.
eg As people have noted this product was widely touted as an iPhone months ago - probably well before Apple officially chose that name.
Unclear Intentions
Perhaps the generous government should have also spelt out the conditions of use for the School's spectrum - I'm surprised they didn't because the profit/not for profit condition is not a good metric if the point of the exercise is to promote educational use by the Schools.