Could a Patent Lawsuit Stop the Xbox 360?

SAN FRANCISCO -- An injunction that could disrupt the distribution of the Xbox 360 game console is possible because of a patent suit that Lucent Technologies has filed against Microsoft, according to attorneys who practice intellectual property (IP) law.

Lucent filed suit against the software vendor last month in a U.S. District Court in San Diego. The networking company, which currently is in the process of merging with Alcatel, says Microsoft has violated a patent it holds on the built-in MPEG-2 decoding capability of the console. At issue is patent number 5,227,878, "Adaptive Coding and Decoding of Frames and Fields of Video."

"I don't think there is any question there's an injunctive threat [from the case]," says Steve Akerly, a partner with law firm McDermott Will & Emery who focuses on IP.

A Stronger Case?

Lucent may have a stronger case for an injunction to block the sale of Xbox 360s than NTP did to shut down BlackBerry service in the recently resolved case against Research in Motion (RIM), Akerly says. That's because Lucent makes and sells technology, whereas NTP was simply a holder of the patent under dispute in its case, he explains, adding, "I don't know for sure, but it wouldn't surprise me if Lucent practiced the patent, unlike an NTP."

A Lucent representative reached Friday could not comment on whether the company has technology based on the patent in question.

NTP eventually won a $612.5 million settlement from RIM in its case.

Lucent and Microsoft's case is more complicated than that one, however, because the companies have clashed over the patent before, says Paul Lesko, an associate attorney who leads the Intellectual Property Litigation Group at SimmonsCooper LLC, based in Chicago.

Background

In a previous suit filed in 2003, Microsoft sued Lucent in an effort to seek a judgment of noninfringement of the patent after Lucent brought lawsuits against hardware makers Dell and Gateway over the same patent. Microsoft was successful; a judge last year granted summary judgment in the company's favor because of a typographical error in the patent.

Lucent has since corrected the error with the U.S. Patent and Trademark Office and received an official patent-correction notice. Although Microsoft was awarded a judgment in the first case, it did not bar Lucent from taking separate action against Microsoft in the future.

Close examination and arguments over the change made to the patent after the typographical error was corrected could take up a lot of time in the current case and affect its outcome, Lesko says. He acknowledges that an injunction is not out of the question, but says it might take years before the case got to that step.

"I wouldn't expect the Xbox 360 to be pulled off the market at this point," Lesko adds. "It's not unheard of for patent cases to go to trial two or more years later."

Since Lucent has asked for a trial and damages and not a preliminary injunction in its case, it's likely the company will see if the case goes to trial before requesting that Microsoft discontinue selling Xbox 360 consoles, he notes.

Microsoft says it is currently reviewing the charges filed by Lucent.

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