After assessing damages based on each Windows PC sold since May 2003, a federal jury in San Diego ordered Microsoft to pay $1.5 billion to Alcatel-Lucent in a patent dispute over MP3 audio technology. Alcatel-Lucent spokeswoman Mary Lou Ambrus praised the ruling: "We made strong arguments supporting our view, and we"re pleased with the court"s decision." In a statement, Microsoft Deputy General Counsel Tom Burt said that the verdict "is completely unsupported by the law or the facts. We will seek relief from the trial court, and if necessary, appeal." The company also noted that roughly half of the damages are for overseas sales of Windows, which could be affected by a separate patent case currently before the Supreme Court. The case dates back to 2003, when Lucent first sued Dell and Gateway and Microsoft stepped into the legal fray. "This case is only one part of a larger dispute between Microsoft and Alcatel-Lucent over intellectual property that began when Alcatel-Lucent took aggressive action against our customers and later against Microsoft. We will continue to defend our customers against unfounded claims," Burt said.
Microsoft said it believes that it properly licensed MP3 technology from Fraunhofer, paying the German company $16 million. Fraunhofer helped develop the MP3 compression technology and has licensed its intellectual property to companies that want to use the audio format in their products. "Therefore, today"s outcome is disappointing for us and for the hundreds of other companies who have licensed MP3 technology. 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," Burt said. Alcatel-Lucent"s Ambrus declined to say whether the company might pursue other companies that use MP3 technology in their products.