The computing giant refused to pay usage fees for the Motorola-owned patent, insisting that the firm and its parent company were demanding too high a license fee.
Reports suggest that Google was forced to withdraw its legal complaint due to a US Federal Trade Commission ruling that the web giant must license out essential, or FRAND patents, at a fair and reasonable price.
"It's noticeable that in the last two to three years the pace of product development has slowed down because everyone is terrified of patent disputes," DMG tech analyst Chris Green told BBC News.
Google had previously demanded $4bn (£2.5bn) a year in royalties for the patents, while Microsoft argued they were worth only $1m (£623,000) per year due to the essential nature of the patents.
The lengthy legal battle followed, which at one stage resulted in Google winning sales injunction against the Xbox 360 and various Microsoft PC software in the German market. However, the ban was later overturned.
The resolution has sparked rumours that other technology companies locked in similar patent disputes could follow Google's lead.