Microsoft Dodges $1.5 Billion Payment Over the Use of MP3 Technology

In February 2007, Microsoft lost one stage of its legal battle with Alcatel-Lucent over the usage of MP3 technology patented by the Paris-based telecommunications company. At the time, the jury's verdict ordered Microsoft to pay Alcatel-Lucent no less than $1.52 billion for patent infringement. The ruling at the beginning of the year was the largest patent verdict in the history of the United States. Microsoft however failed to agree with the jury's decision and fought the ruling managing to persuade U.S. District Judge Rudi Brewster in San Diego to turn Alcatel-Lucent MP3 patent win into a defeat. The judge negated the February verdict on the basis that Microsoft has a licensed one of the two patents allegedly being infringed by the Redmond company.

"This reversal of the judge's own pretrial and post-trial rulings is shocking and disturbing, especially since after a three-week trial and four days of careful deliberation, the jury unanimously agreed with us, and we believe that their decision should stand. We still have a strong case, and we believe that we will prevail on appeal," stated Mary Lou Ambrus, an Alcatel-Lucent spokeswoman, as cited by SeatllePI. "Today's ruling by the judge reversing the jury's $1.52 billion verdict against Microsoft is a victory for consumers of digital music and a triumph for common sense in the patent system. For the hundreds of companies large and small that rely on MP3 technology, the Court's ruling clarifies that these companies have properly licensed the technology embodied in the '080 patent from its co-owner and industry recognized MP3 licensor - Fraunhofer," revealed Brad Smith, Microsoft's general counsel.

The judge argued that the jury's decision was in contradiction with the evidences presented in the trial. All eyes are now on Alcatel-Lucent as the ball is in the French company's court for the time being. Microsoft had argued from the get go that it had licensed the use of MP3 technology from Fraunhofer, a German company that co-owns the patent together with Alcatel-Lucent.