Alcatel-Lucent claimed that its Bell Labs
subsidiary owns patents on technology which encodes audio in the
MP3 format. Microsoft said that a licence it has from German firm
Fraunhofer-Gesellschaft entitled it to incorporate MP3 encoding in
its Windows operating system.
In 2003, before it merged with Alcatel, Lucent
filed 15 claims of patent infringement against PC makers Gateway
and Dell. Microsoft chose to join the case as a defendant because
it said that the claims of infringement touched on its Windows
system.
Though Alcatel-Lucent was awarded $1.52
billion by a San Diego court and not the $4.5 billion it originally
sought, the case is still a victory for the network equipment
maker.
"We've made strong arguments supporting our
view, and we are pleased with the court's decision," said an
Alcatel-Lucent spokeswoman.
Microsoft said that the court made the wrong
decision.
"We think this verdict is completely
unsupported by the law or the facts," said Tom Burt, Microsoft
deputy general counsel. "We believe that we properly licensed MP3
technology from its industry recognized licensor, Fraunhofer. The
damages award seems particularly outrageous when you consider we
paid Fraunhofer only $16 million to license this technology," Burt
told news agency AP.
The decision could affect other companies
which licence MP3 technology from Fraunhofer, including household
names such as Apple, Sony and Nokia. Microsoft said it would appeal
the decision.
