Microsoft hit with $1.5 billion patent violation fine

Filed under: Audio, News, Windows, Microsoft

Microsoft hit with $1.5 billion patent violation fine

by Brad Linder Feb 22nd 2007

A federal jury has ruled that Microsoft has to pay $1.5 billion dollars to Alcatel-Lucent for violating two patents the telecommunications equipment maker held related to MP3 audio technology.

Alcatel-Lucent and Fraunhofer worked together to develop the nearly universal digital music format. Microsoft says it paid Fraunhofer $16 million dollars to license the technology for use in its Windows operating systems. The ruling could mean that dozens of other companies that did not license the technology from Alcatel-Lucent could face similar lawsuits in the future, although Microsoft obviously has some of the deepest pockets.

The $1.5 billion figure is based on a percentage of all Windows-based PCs sold since 2003. With Windows Vista and Zune sales slow, this is not a good time for Microsoft. Then again, if sales had been slow earlier, the fine wouldn't be so hefty, right?

Microsoft's lawyer says the company plans to seek relief from the court, or possibly to appeal the ruling.

Tags: alcatel lucent, AlcatelLucent, fraunhofer, lawsuit, mp3

Reader Comments (Page 1 of 1)

saxamoophone said 8:59PM on 2-22-2007

I don't know all the details, but, sounds like a VERY stupid case. Why would Microsoft fork over millions of dollars to license it if they were "trying to steal it"

And 1.5 billion? What percent did they get because that seems ridiculous.

This will ONLY be bad for consumers

Edsel said 9:03PM on 2-22-2007

This is bad, bad for everyone including Apple. This industry is tearing itself apart and the greedy are cashing in on a very broken patent system in the United States.

Diddle said 7:23AM on 2-23-2007

These stupid lawsuits aren't benefiting either company, nor the public. Stupid cashgrab if you ask me. $1.5B... geez.

johnnyg0 said 12:49PM on 2-23-2007

Funny thing is Microsoft had paid 16 millions $ to Fraunhofer to license it (creators of the MP3 format),.. so now everyone who has a license from Fraunhofer should look to get another license from Lucent? That's going to cost a lot.

Junal said 3:12PM on 2-24-2007

$1,500M fine is outrageus when Microsoft bought the patent right for a meager $16M, who most likely might have split the proceeds to Alcatel-Lucent.
It is ludicrous and complete piracy. Our judicial system needs major revamping. And how can our American jury hand over that much money to a foreign entity???

Herbie2 said 9:17PM on 2-25-2007

One more example that the US patent process is hopelessly broken. The patent process has turned into a vehicle for blackmail as demonstrated in this case and the case of Research In Motion (RIM) versus NTP. RIM paid hundreds of millions of dollars to NTP even though the US patent office had re-examined the five NTP patents involved and ruled them invalid. Thanks to some knuckle-headed judge who threatened to shut down the Blackberry network (and incidently much of the communications for Congress and the Military) if RIM did not pay, NTP, not even a real company which makes product, but a consortium which purchases and trades in patents, walked away with a gold mine. This probably also demonstrates why judges should be appointed and not elected. You can bet NTP will support this clown for years to come.

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