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Sep. 29, 2008

An appeals court ruled on Friday that Microsoft dosen’t have to pay $1.5 billion for patent infringement in a case involving Alcatel-Lucent.

The court case is about the merged company’s contention that Microsoft infringed on Alcatel-Lucent MP3 digital audio patents.

The patents are for converting music from CDs into files for use on mobile devices and wireless laptops.

In March 2007, a San Diego jury had ruled that Microsoft was guilty of infringing on two specific patents and awarded Alcatel-Lucent $1.52 billion, a record patent damage award by any standards.

However, in August of last year, U.S. District Court Judge Rudi Brewster rejected the jury’s verdict, saying that one of the patents wasn't infringed and that the other was co-owned by German research institute Fraunhofer Institute, which had licensed the technology to Microsoft.

This case is only a sample of a much broader intellectual property dispute between the two companies.

When litigation began in October 2006, fifteen patents were identified as in the dispute. Two claims were dismissed leaving the remaining cases up for trial.

A spokesman for Alcatel-Lucent said the company is reviewing its options.

Microsoft wasn't available for comment.

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