Microsoft wins patent battle with Alcatel-Lucent

26 September 2008

The US Court of Appeals for the Federal Circuit yesterday ruled in favour of Microsoft in a case where the French-US telecom firm Alcatel-Lucent had filed a $1.5- billion MP3 digital audio patents infringement suit claiming Microsoft had violated the patents for Media Player software.

Before it merged with Alcatel SA of France in 2006, Lucent Technologies had filed a US federal lawsuit in 2003 claiming Microsoft partners, including computer makers Dell and Gateway, used Windows software that infringed its patented technology.

The case is part of a broader intellectual property dispute between Microsoft and Alcatel-Lucent. A total of 15 patents were in dispute when the litigation began. Two of the claims were dismissed and the remaining patents were divided into six groups, each the subject of separate jury trials in San Diego.

Alcatel-Lucent argued in court that technology used to encode and decode digital audio files in Media Player infringed on its patents.

The court ruled that US computer software giant Microsoft does not have to pay Alcatel-Lucent $1.5 billion as it had not violated one of of Alcatel-Lucent's patent for MP3 digital audio technology enabling users to convert music from CDs into files on computers and vice versa. It also ruled that Microsoft held a valid license for another patent where it had paid $16 million to the German licensing company, Fraunhofer Gesellschaft.

The case goes back to 2007 when a district court in San Diego ruled Microsoft had infringed two patents of Alcatel-Lucent and awarded Alcatel-Lucent $367.4 million, which made Microsoft appeal in the US District Court who ruled in favour of it saying Microsoft's Windows Media Player software did not violate one of the patents and it had paid $16 million to Fraunhofer Gesellschaft for the second patent which is jointly owned by Fraunhofer Gesellschaft and Alcatel-Lucent.