Alcatel-Lucent v. Microsoft

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Alcatel-Lucent claims ownership of several patents relating to MP3 encoding and compression technologies. In November 2006, (prior to the companies' merger) Alcatel filed several lawsuits against Microsoft, alleging infringment of seven of its patents relating to MP3 audio technology used in Microsoft Windows operating systems.

On February 22, 2007, a San Diego court upheld the first suit, and awarded Alcatel-Lucent a record-breaking $1.52 billion in damages. Alcatel-Lucent had been seeking $4.5 billion, but the jury found that Microsoft's violation had not been willful. Microsoft has said it will appeal the verdict, maintaining that the federal jury's decision is "unsupported by the law or facts",^[1] since Microsoft had already paid $16 million to license the technology from Fraunhofer IIS which, it claims, is "the industry-recognized rightful licensor".^[2]

A week later on March 2, U.S. District Judge Rudi Brewster ruled in the second suit that Microsoft hadn't violated Alcatel-Lucent's patents relating to speech recognition and the case was therefore dismissed before going to trial. Alcatel-Lucent intends to appeal.^[3]^[4]

The trial in the third suit, involves several user interface-related patents, is scheduled to begin on May 21.

[edit] Origin of the case

The lawsuit's history began in 2003 when Lucent Technologies (acquired by Alcatel in 2006) filed suit against Gateway and Dell, claiming they had violated patents on MP3-related technologies developed by its Bell Labs division. Microsoft joined the lawsuit in April of 2003.^[5]