Alcatel & Microsoft: IPTV allies one day, litigants the next

Stuart Corner
Friday, 24 November 2006 09:58

IT Industry - Deals

Alcatel is suing Microsoft over what are believed to be alleged infringements of its intellectual property in IPTV middleware yet the two have had a close alliance in this area ever since they were awarded major complementary contracts for SBC's Project Lightspeed.

 

Alcatel has been very coy about the dispute - its announcement appeared as a one paragraph press release on the Alcatel web site unhelpfully titled simply "statement." In that, the company said: "Alcatel and Microsoft have been engaged in intellectual property licensing discussions. On November 17, 2006, Alcatel filed a lawsuit in the US District Court for the Eastern District of Texas regarding the intellectual property rights involved in those discussions. This lawsuit was initiated to preserve Alcatel's rights to fair compensation for its intellectual property rights used by Microsoft. Alcatel hopes that the matter can be resolved by further discussions rather than by the courts."

US reports of the dispute, citing the number of one of the Alcatel patents at issue, have speculated that it could be around IPTV middleware, video encoding or even involve Xbox, which has video capabilities.

If this is the case the dispute could impact their successful IPTV collaboration as the intellectual property at issue is likely to be a key component of this.

Alcatel and Microsoft announced in February 2005 a global collaboration agreement designed to rapidly accelerate the availability of IPTV services for broadband operators world-wide. The two companies said they would develop an integrated IPTV delivery solution. That "builds upon Alcatel's leadership in broadband, IP networking, development, and integration of end-to-end multimedia and video solutions, and Microsoft's leadership in TV software solutions and connected-entertainment experiences across consumer devices.

The formal alliance followed the two companies winning complementary roles in SBC' Project Lightspeed FTTN/FTTH rollout in late 2004. SBC chose Microsoft's IPTV platform for the delivery of television programming over its $US4 billion fibre to the node/customer network that it expected pass 18 million US homes by the end of 2007. The SBC IPTV deal with Microsoft, valued in excess of $US400 million over 10 years, was, according to the two companies, the first of its kind for any US-based telecommunications provider.

Alcatel had been awarded a $US1.7 billion contract as primary supplier and systems integrator for the project. Alcatel subsequently ceased development of its own IPTV middleware in favour of partnering with Microsoft to further develop the Microsoft product. Earlier this year the alliance was expanded to include HP and IBM