Alcatel Loses $1.5 Bln Microsoft Judgement

A U.S. appeals court has ruled Microsoft doesn't have to pay a $1.5 billion penalty for infringing on MP3 patents.

In what may be the final note on a series of lawsuits that have been dragging its way through the courts since 2003, a U.S. Appeals court has ruled (PDF) that Microsoft doesn’t have to pay a $1.5 billion judgement levied against it because it didn’t actually violate MP3 patents in its Windows Media Player software.

“We affirm the district court’s dismissal of the infringement claims,” the court wrote in its ruling, finding the Microsoft did not infringe on a patent now owned by Alcatel, and that the Redmond company had adequately covered its based by paying $16 million to Germany’s Fraunhofer Gesellshaft to MP3 technology.

The original suit, originally filed by Lucent, landed in 2003 and included computer makers Gateway and Dell in a broad legal salvo that alleged the companies were using Lucent technology to MP3-enable their software and systems without licensing the technology. In 2007, a jury awarded a record-setting $1.5 billion to Alcatel over the charges, but the verdict was later overturned on appeal.

Alcatel has managed to go after Microsoft successfully on patent infringement claims; earlier this year, a judge upheld a $368 million penalty against Microsoft over handwriting recognition and date entry technologies…with interest, the penalties topped $512 million. Microsoft also successfully dodged a patent infringement suit from Alcatel over video encoding technology.