Alcatel-Lucent v. Microsoft

Origin of the cases

The dispute between Microsoft and Lucent (and later Alcatel-Lucent) began in 2003 when Lucent Technologies (acquired by Alcatel in 2006) filed suit against Gateway and Dell in U.S. District Court, San Diego, California. Lucent claimed in this first San Diego case that Dell and Gateway had violated patents on MP3-related technologies developed by Bell Labs, a division of predecessor company American Telephone & Telegraph. Other patents said to be infringed relate to MPEG video technology, speech technology, internet technology, and other technologies. Microsoft voluntarily joined the lawsuit in April 2003 and Alcatel was added after it acquired Lucent. [cite news| url=http://www.physorg.com/news91425550.html| title= Microsoft ordered to pay Alcatel-Lucent $1.52B for infringement| date=2007-02-23| accessdate=2007-02-24| publisher=Physorg.com]

After the first San Diego lawsuit was filed, Microsoft and Lucent have filed additional patent lawsuits against each other.

In February 2007, Microsoft filed a lawsuit at the International Trade Commission claiming that Alcatel-Lucent infringed its patents. [ [http://www.dspdesignline.com/news/198100686 ITC to rule on Microsoft, Alcatel-Lucent IPR spat | DSP DesignLine ] ]

There is a second case in San Diego where Microsoft is asserting that Alcatel-Lucent infringes 10 of its patents, and yet another case in Texas where each alleges that the other is infringing its patents. [ [http://www.informationweek.com/news/showArticle.jhtml?articleID=201304159 Microsoft's Court Battles With Alcatel-Lucent Far From Over - Patents - InformationWeek ] ]

Patents

In the first San Diego case, Alcatel-Lucent claims ownership of several patents relating to MP3 and MPEG encoding and compression technologies, as well as other technologies. The patents were obtained as the result of work done at Bell Labs before the break up of American Telephone & Telegraph. Certain patents at issue are:

U.S. Patent No. 5,341,457, Perceptual Coding of Audio Signals, to Joseph L. Hall and James D. Johnston. [ [http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.htm&r=1&f=G&l=50&s1=5,341,457.PN.&OS=PN/5,341,457&RS=PN/5,341,457 United States Patent: 5341457 ] ]

U.S. Reissue Patent No. RE39,080, Rate loop processor for perceptual encoder/decoder, to James D. Johnston. [ [http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.htm&r=1&f=G&l=50&s1=RE39,080.PN.&OS=PN/RE39,080&RS=PN/RE39,080 United States Patent: RE39080 ] ]

Trials

The first part of the San Diego case involved the '457 and '080 audio coding patents. Alcatel-Lucent claimed that Microsoft's Windows Media Player infringed these patents by virtue of its MP3 capabilities. Testimony was given by inventors James Johnston and Joseph Hall. Coincidently, AT&T inventor James Johnston was employed by Microsoft post-AT&T breakup and during the trial. [ [http://www.caip.rutgers.edu/news/bios/Johnston.htm August 15 ] ] Additional testimony was taken from Dr. Karlheinz Brandenburg, who worked with Johnston at Bell Labs.

On February 22, 2007, a San Diego jury found for Alcatel-Lucent and against Microsoft. Alcatel-Lucent was awarded a record-breaking $1.52 billion in damages. The damages could have been $4.5 billion but the jury was unable to decide if the infringement was "willful." Microsoft disputed the verdict, maintaining that the federal jury's decision was "unsupported by the law or facts", [ [http://news.bbc.co.uk/1/hi/business/6388273.stm BBC NEWS | Business | Microsoft faces $1.5bn MP3 payout ] ] since Microsoft had already paid $16 million to license the technology from Fraunhofer IIS which, it claims, is "the industry-recognized rightful licensor". [ [http://news.com.com/Microsoft+hit+with+1.5+billion+patent+verdict/2100-1030_3-6161480.html?tag=nefd.top Microsoft hit with $1.5 billion patent verdict | CNET News.com ] ]

Subsequently, on August 6, 2007 the federal judge in San Diego, U.S. District Judge Rudi Brewster, granted Microsoft's motions for Judgment and for new trial, saying that the jury's decision was not supported by the evidence. The Judge's Order [ [http://www.microsoft.com/presspass/download/legal/Other/08-06-07Alcatel-LucentRuling.pdf Pleading Paper ] ] found that there was insufficient evidence both for Microsoft's liability and for the damages model used by Alcatel-Lucent. Alcatel-Lucent has appealed the judge's decision, [cite news| url=http://origin.arstechnica.com/news.ars/post/20070806-judge-tosses-verdict-1-52-billion-award-in-microsoft-mp3-patent-case.html| title=Judge tosses verdict, $1.52 billion award in Microsoft MP3 patent case| first=Eric| last= Bangeman| publisher=arstechnica| date=2007-08-06| accessdatep=2007-08-07] and the Court of Appeals for the Federal Circuit heard oral arguments in July 2007.

A week after the first jury verdict, on March 2, Judge Brewster ruled in the second part of the case that Microsoft had not violated Alcatel-Lucent's patents relating to speech recognition and the case was therefore dismissed before going to trial. Alcatel-Lucent stated that it intends to appeal. [cite news| url=http://news.com.com/Microsoft+wins+in+second+Alcatel-Lucent+patent+suit/2100-1014_3-6163828.html?tag=nefd.top| title=Microsoft wins in second Alcatel-Lucent patent suit| first=Anne| last= Broache| publisher= CNET News.com| date= 2007-03-02| accessdate=2007-03-04] [cite news| url=http://www.pcworld.com/article/id,129581-c,legalissues/article.html| title=One Patent Claim Against Microsoft Dropped| first=Elizabeth| last= Montalbano| publisher=| date=2007-03-03| accessdatep=2007-03-04]

The trial in the third part of the San Diego case involved four patents. In April 2008, US jury awarded Alcatel-Lucent $367.4 million in damages after finding that Microsoft had violated two patents related to the user interface in its software. [ [http://www.reuters.com/article/businessNews/idUSN0435406720080405 Jury rules for Alcatel in Microsoft patent case | Reuters ] ] In June 2008, the trial judge upheld the jury's verdict and increased the damage award against Microsoft to $512 million to account for interest. [ [http://uk.reuters.com/article/technologyNewsMolt/idUKN2038289020080620 U.S. judge upholds Alcatel award in Microsoft case | Reuters ] ]

In the fourth San Diego case, the jury issued its verdict on June 2, 2008. This time both Microsoft and Lucent were asserting that the other side was infringing its patents. The jury found that Lucent did not infringe Microsoft's patents (and one patent was invalid) and that Microsoft's Xbox did not infringe Lucent's patent. [ [http://www.bloomberg.com/apps/news?pid=20601127&refer=law&sid=ahUbyThu1JdE Bloomberg.com: Law ] ]

ee also

*Microsoft litigation

References