Jury says Microsoft should pay Alcatel-Lucent $1.5 billion

Stephen Withers
Friday, 23 February 2007 04:14

Business IT - Technology

A US jury has awarded Alcatel-Lucent $US1.5 billion damages for patent infringements by Microsoft involving various versions of Windows including Vista, but the software giant will ask the judge to set aside the verdict.

Although Microsoft said it had licensed the MP3 technology from Fraunhofer, the jury found that it had infringed two of Alcatel-Lucent's patents relating to MP3 audio.

"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-recognised rightful licensor," said Tom Burt, Microsoft's deputy general counsel.

Microsoft also supports MP3 on its Zune mobile player.

The case appears to illustrate a problem with patent licensing: just because you obtain the rights to use a certain technology, can you be sure that it is possible to implement it without infringing another patent?

To give a trivial and fictitious example, a licence to paint signs on walls might be of limited value if another party has patented the process of putting paint on walls.

Both Bell Labs and Fraunhofer were involved in the development of the MP3 technology, and the former is now part of Alcatel-Lucent. Several key technologies have emerged from Bell Labs, including the transistor, cellular telephony, lasers and Unix.