Big Win for Microsoft in Alcatel-Lucent Patent Case

A federal judge Monday effectively reversed a US$1.5 billion patent-infringement award against Microsoft Corp. in a case involving MP3 technology.

Ruling on post-trial motions in a lawsuit by Alcatel-Lucent SA, Judge Rudi Brewster of the U.S. District Court for the Southern District of California in San Diego said one patent in the case wasn't infringed by Microsoft. On the other patent, the court couldn't didn't have jurisdiction because a co-owner of the patent didn't join in the suit.

In February, a jury awarded Alcatel-Lucent $1.5 billion in damages for infringement of two of its patents covering MP3 audio technology. It was one of six cases involving a series of patent disputes between the two companies. Lucent Technologies Inc. had brought the suit in 2003 before it merged with Alcatel SA.

On Monday, Judge Brewster ruled that Microsoft had not infringed one of the two patents. On the other patent, the judge found that Fraunhofer, a research organization based in Europe, was a co-owner of the patent with Alcatel-Lucent. Because Fraunhofer didn't join in the suit, Brewster's court didn't have jurisdiction over the suit on that patent. Microsoft already licenses the MP3 patents from Fraunhofer, said Microsoft spokesman Guy Esnouf.

Alcatel-Lucent said Monday it will appeal the rulings at the U.S. Court of Appeals for the Federal Circuit, in Washington, D.C.

"This reversal of the judge's own pre-trial and post-trial rulings is shocking and disturbing, especially since -- after a three-week trial and four days of careful deliberation -- the jury unanimously agreed with us, and we believe their decision should stand," Alcatel-Lucent said in a statement.

The decisions remove the damage award, Microsoft's Esnouf said. Even if Alcatel-Lucent wins its appeal, both the rate of the royalty and the basis for calculating it -- a percentage of the value of a PC -- will be tried again, he said.