Microsoft must pay $1.52 billion for infringing on two Alcatel-Lucent patents involving MP3, a San Diego federal jury ruled today. This is the first of six patent lawsuits brought by Paris-based telecom equipment maker Alcatel-Lucent. Microsoft intends to “seek relief from the trial court, and if necessary appeal.”
The lawsuit contends that Microsoft violated Alcatel-Lucent’s patents with its use of MP3 technology used to play music on Windows Media Player. Microsoft’s argument is that it legally licensed MP3 technology from the Fraunhofer Institute for $16 million.
“We think this verdict is completely unsupported by the law or the facts,” said Tom Burt, a Microsoft deputy general counsel. “We believe that we properly licensed MP3 technology from its industry recognized licenser - Fraunhofer. The damages award seems particularly outrageous when you consider we paid Fraunhofer only $16 million to license this technology.” “We have made strong arguments supporting our view, and we are pleased with the court's decision,” said an Alcatel-Lucent spokeswoman.
This lawsuit stretches back to 2003, when Lucent filed 15 patent claims against Gateway and Dell. Microsoft later agreed to replace those defendants, saying it got involved because the patents were closely tied to its Windows operating system, reports Reuters.
MP3 isn’t the only technology that Alcatel-Lucent is suing Microsoft for patent infringement. In November 2006, Alcatel-Lucent filed a lawsuit against Microsoft for infringement of seven video technology patents, likely because of the Xbox 360.
View: FAQ: Behind Microsoft's MP3 patent jam @ C|Net News