Microsoft to Pay $1.5 Billion in Patent Infringement Case

Thursday a federal jury ruled that Microsoft must pay $1.5 billion in patent infringement damages to Alcatel-Lucent.  Lucent, acquired in 2006 by Alcatel, had previously, in 2002 and 2003, filed 15 patent claims against several computer makers for patents that involve converting audio into digital MP3 files on PC's.Are you a victim of patent infringement? If so, contact one of our litigation attorneys in your area today!Microsoft says it properly licensed the MP3 technology from Fraunhofer-Gesellschaft, a German research company, for $16 million, in 1997 and 2004.

Microsoft's Deputy General Counsel said, "We are concerned that this decision opens the door for Alcatel-Lucent to pursue action against hundreds of other companies who purchased the rights to use MP3 technology from Fraunhofer, the industry recognized rightful licensor.

Damages were determined by multiplying Windows sales and average PC sales prices worldwide since May 2003.  However, the verdict is not necessarily a financial blow to Microsoft as much as it is negative public-relations impact.

Typical patent infringement penalties include:

• Compensation increased by as much as three times the actual damages
• An injunction to prevent further infringement
• No criminal penalties

The same federal court in San Diego will consider the next of the patent laws, this time covering speech coding and video coding with Microsoft’s Xbox and Windows interface.

Despite several more pending cases, typically large jury verdicts on patent infringement cases are typically appealed, and damages can be reduced significantly or reversed.

In fact analyst Matt Rosoff of directions on Microsoft says, "this thing is far from over." He also noted that Microsoft successfully appealed a $521 million patent infringement award in 2003 for Eolas Technologies.  This case is currently still in court.Are you a victim of patent infringement? If so, contact one of our litigation lawyers in your area today!