Motorola Mobility does not infringe a Microsoft radio interface patent, the regional court in Mannheim, ruled on Friday.
Microsoft had accused Motorola Mobility of infringing on a patent that describes a radio interface layer that provides a level of abstraction between the radio and software on a cell phone.
Microsoft sued Motorola in Germany, asking the company to pay licensing fees on its Android-based smartphones as rivals HTC and Samsung Electronics have done.
"This decision does not impact multiple injunctions Microsoft has already been awarded and has enforced against Motorola products in Germany," said David Howard, associate general counsel at Microsoft.
This is a rare victory for Google-owned Motorola Mobility, as Microsoft has won three patent cases against Motorola in Germany.
Two earlier German injunctions are being enforced and the third one will be soon. One of the rulings included a sales ban on the Motorola Atrix, the Droid Razr and the Droid Razr Maxx.
Microsoft also has an injunction against Motorola in the U.S., where the International Trade Commission ruled that Motorola infringes on an ActiveSync patent.