Ding! Microsoft Told To Pay $1.5B For MP3

    February 23, 2007
    WebProNews Staff

Microsoft blasted a decision made in US District Court in San Diego calling for the company to pay Alcatel-Lucent $1.5 billion for infringing on MP3 technology patents they own.

Thursday proved a rough day for Microsoft. The morning began with Google’s formal launch of its Premier Apps for enterprises, offering guaranteed email uptime and a selection of online applications that could fill a space for some companies who might otherwise purchase Microsoft Office and Exchange. (You may have noticed our coverage of that. If not, we hope you’ve recovered from whatever kept you from visiting the site.)

While Premier Apps shouldn’t result in a mass exodus from Microsoft products by hundreds of millions of Office/Exchange users, the later news out of California definitely made the people in Redmond feel more persecuted.

The District Court found that Microsoft needs to pay Alcatel-Lucent $1.52 billion dollars for patent infringement. A Bloomberg report noted the jury decided Microsoft impropery used technology related to a pair of digital music patents held by the French company in Windows Media Player.

Microsoft disputed Alcatel-Lucent’s claim and criticized the decision made by the court.

Microsoft Deputy General Counsel Tom Burt said they licensed the technology from a German firm, Fraunhofer, who they say is the rightful licensor of MP3 technology since they were the ones who invented it:

"We think this verdict is completely unsupported by the law or the facts. We will seek relief from the trial court, and if necessary appeal. "Like hundreds of other companies large and small, we believe that we properly licensed MP3 technology from its industry recognized licensor – Fraunhofer. The damages award seems particularly outrageous when you consider we paid Fraunhofer only $16 million to license this technology. "Therefore, today’s outcome is disappointing for us and for the hundreds of other companies who have licensed MP3 technology. We are concerned that this decision opens the door for Alcatel-Lucent to pursue action against hundreds of other companies who purchased the rights to use MP3 technology from Fraunhofer, the industry-recognized rightful licensor."

Burt also said the case is just one part of a bigger, ongoing dispute between Microsoft and Alcatel-Lucent.

Industry analysts cited by Bloomberg think that Alcatel-Lucent would use this decision as a springboard to sue other companies illegally using those MP3 patents.


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