14 DAY TRIAL // Alcatel-Lucent will bleed no less than $1.52 billion from Microsoft, after a decision in its favor over patent infringement in a San Diego federal court. The San Diego jury found that Microsoft infringed on two patents over MP3 audio technology owned by Alcatel-Lucent that were included in the Windows operating system. The financial damages Microsoft has ordered to pay, exceeding $1.5 billion, are associated with each Windows PC sold since May 2003.
"We made strong arguments supporting our view, and we're pleased with the court's decision," said Mary Lou Ambrus, an Alcatel-Lucent representative. Lucent-Alcatel - which was originally Lucent Technologies - has debuted legal action over 15 patented technologies it alleged were illegally used in Windows Media player. Only 13 patent infringement disputes resulted in trails, and this verdict is limited to just the first two patents.
Microsoft claims it has licensed all the technology in Windows Media Player from Fraunhofer, a German developer which claims co-ownership over MP3 technology.
"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," said Microsoft Deputy General Counsel Tom Burt.
Microsoft attacked the verdict aggressively. The Redmond Company has voluntarily assumed the role of defendant in this case that was aimed at Gateway and Dell. Microsoft criticized the decision of the San Diego jury.
"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 added.
But although the verdict was favorable to Alcatel-Lucent, Microsoft will not pay the financial damages of $1.5 billion. The Redmond Company licensed the MP3 technology for $16 million from Fraunhofer, and will appeal the decision.
"This case is only one part of a larger dispute between Microsoft and Alcatel-Lucent over intellectual property that began when Alcatel-Lucent took aggressive action against our customers and later against Microsoft. We will continue to defend our customers against unfounded claims and are pursuing a number of patent claims against Alcatel-Lucent, including the International Trade Commission case filed earlier this week."