Jury Tells Microsoft To Pay $1.5 Billion To Alcatel-Lucent Over MP3 Patents

from the mp3-tech-to-get-more-expensive dept

Jury trials over patent disputes quite often turn out in favor of the patent holder, so it's no surprise to see that a jury in San Diego hasn't just sided with Alcatel-Lucent in its patent dispute with Microsoft, but also has ordered that Microsoft pay $1.5 billion for supposedly violating patents having to do with MP3 technology. The details of the case are a little bit complex. Back in the late 80s, AT&T's Bell Labs teamed up with the Fraunhofer Institute to develop the MP3 standard. Fraunhofer ended up with a bunch of patents, and most companies that make use of MP3 technology pay Fraunhofer for the privilege. However, AT&T's Bell Labs claimed some patents related to the standard as well. Microsoft, however, claims the company had a patent reissued and backdated to make it look like it came before the Fraunhofer patents and that the two patents in question are invalid. Of course, since then, Bell Labs was spun off to become Lucent, which later merged with Alcatel. Somewhere along the line, Lucent's management realized how much money people were making off these patent things, and decided to make a big splash demanding that everyone using MP3 technology shouldn't just be paying Fraunhofer, but Lucent as well. Lucent went after Microsoft, but if it wins this suit (and the subsequent appeals), you can bet that just about everyone else who uses MP3 technology will be subject to similar claims as well -- perhaps making MP3 technology a lot more expensive. About the only good thing in the ruling is that the award of $1.5 billion is that it's less than the $4.6 billion Alcatel-Lucent has mentioned in the past. Microsoft will obviously appeal, and it will take some time to get this all sorted out -- but it seems like MP3 technology may be getting a bit more expensive thanks to patents. In the meantime, if all of this sounds familiar, perhaps that's because it mirrors the situation with JPEG patents, where companies suddenly showed up well after the standard was popular to claim patent rights.
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  1. identicon
    MPMsoft billing software, 12 May 2008 @ 12:35pm

    Exempt from intellectual property rights?

    RE: "U.S. Government constitutionally exempt from intellectual property rights". If true, it sounds like an interesting software opportunity. I wonder if the there are billing software innovations to look at? Regarding software patents in general, a friend of mine that practices intellectual property law tells me that only cases like Microsoft's ever make the spotlight because most of the time the offending party has few assets to sue. The deep pockets principle. We see our software usability and design being imitated by numerous competitors. I wonder if MPMsoft would be able to patent design and usability as well.

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