Microsoft Loses Big In MP3 Patent Dispute With Alcatel-Lucent
A Federal jury in California ordered Microsoft to pay $1.52 billion for infringing on two Alcatel-Lucent MP3 audio code technology patents. Microsoft violated Alcatel-Lucent’s patents by using their MP3 technology in its Windows Media Player. Microsoft argued that it licensed the technology from the Fraunhofer Institute in Germany for $16 million. Fraunhofer and the former Bell Laboratories co-developed MP3 technology. Lucent, which holds patents spawned by research at Bell Labs, was acquired by Alcatel in November.
The lawsuit is part of a complex patent battle between the two companies. The dispute goes back to 2003, when Lucent sued Dell Inc. and Gateway Inc. over the use of video memory, video-search functions and the use of a stylus to control a computer. At the time, Microsoft stepped in to offer legal protection as a result of its indemnity agreement with its partners.
Microsoft said in a filing last week with the U.S. District Court of Delaware that Alcatel-Lucent violated four patents dealing with computer and phone systems that monitor and run calls, messages and video communications. Microsoft claimed Alcatel was already selling products that used the technology.
In April, Lucent sued Microsoft for illegally using Lucent’s video-decoding technology in Microsoft’s Xbox 360 videogame system. The two had a prior agreement for the original Xbox, but Lucent argued that it didn’t extend beyond the older system. A month later, Microsoft filed a countersuit seeking to dismiss the claims.
The Future: What a bunch of babies. The only people who win these types of legal battles are the lawyers. Microsoft will, of course, appeal the ruling dragging this on for another year or two until one of the companiesl settles, or grows up.