Microsoft MP3 Judgment Set Aside

A San Francisco judge has set aside the massive $1.5 billion judgment against Microsoft in an MP3 patent infringement case.

A federal district court judge in San Francisco has set aside the $1.5 billion judgment against Microsoft in a patent infringement lawsuit over the technology for digital music.   The suit, brought by Alcatel-Lucent, claimed that two patents they’d developed while still part of Bell Laboratories had been the foundation of MP3 technology, which Microsoft uses in its Windows Media Player.   Microsoft paid an MP3 licensing fee to a consortium led by the Fraunhofer Institute, a large German research organization that, along with the French electronics company Thomson and Bell Labs, was part of the format’s development.   Alcatel-Lucent had initially won its case in February, and had been awarded the largest recorded patent judgment.   However, in a 43-page order, Judge Rudi Brewster noted that the award could not stand because Microsoft did not infringe one of the two patents, and that ownership of the second was debatable. A retrial might be necessary.   Alcatel-Lucent has said it will appeal the verdict.   “This reversal of the judge’s own pretrial and post-trial rulings is shocking and disturbing, especially since — after a three-week trial and four days of careful deliberation — the jury unanimously agreed with us,” said Mary Lou Ambrus, a company spokeswoman.   The $1.5 billion figure had been reached by taking 0.5% of the average sales price of an infringing PC and multiplying that by every copy of Windows. However, Alcatel-Lucent had argued that the figure should be increased, since it only accounted for sales of Windows OS up to November 2005.