Alcatel-Lucent Loses $1.54 Billion Damages Claim Against Microsoft
A federal appeals court ruled that Microsoft doesn't have to pay Alcatel-Lucent US$1.54 billion in damages in a patent-infringement case involving MP3s.
The U.S. Court of Appeals for the Federal Circuit affirmed the decision made by a lower court in August 2007 that Microsoft didn't have to pay the jury award because it wasn't in violation of one patent and had rights to the other via a licensing agreement with Germany's Fraunhofer Institute and AT&T.
At trial last year, a jury ruled Microsoft's Windows Media Player violated its Alcatel-Lucent's patents relating to MP3, the most popular file format used to store digital audio. During oral arguments last July before the federal appeals court, Microsoft attorney John Gartman defended Microsoft's licensing agreement, saying that license covers the patents asserted by Alcatel-Lucent. Gartman told the three-judge panel that the joint ownership rights held by AT&T and Fraunhofer extend to any license or intellectual property that stems from their collaboration.
The MP3 patents were originally filed by researchers at Bell Labs, the research-and-development arm of the old AT&T. When AT&T spun off Lucent Technologies in 1996, Lucent retained much of the Bell Labs patent portfolio. French firm Alcatel agreed to acquire Lucent in 2006, forming Alcatel-Lucent.
Alcatel-Lucent initially sued computer makers Gateway and Dell over a series of patents in 2003, and Microsoft subsequently stepped in on their behalf. Alcatel-Lucent claimed computers made by Gateway and Dell using Microsoft products infringed on its patents.
A judge later divided the case into several parts based on the types of patents involved.
Shares of Microsoft were recently up 3.6% to $26.64, while Alcatel-Lucent was up 0.7% to $4.47 amid gains in the broader stock market.
-By Jennifer Hoyt and Fawn Johnson, Dow Jones Newswires; 201-938-2474; jennifer.hoyt@dowjones.com;
(END) Dow Jones Newswires
Posted to the site on 25th September 2008