Judge Overturns $1.5 Billion Patent Award Against Microsoft

A federal judge on Monday reversed a $1.5 billion patent infringement award against Microsoft. According to Judge Rudi Brewster of the US District Court for the Southern District of California, Microsoft did not infringe on one of the two Alcatel-Lucent MP3 patents in question. And because the co-owner of the second patent did not join Alcatel-Lucent in the suit against Microsoft, the court doesn't have jurisdiction to decide the remainder of the case.

Alcatel-Lucent was awarded the $1.5 billion in February when a jury found that Microsoft had infringed on two of Alcatel-Lucent's patents involving the MP3 audio format. However, Judge Brewster ordered the award overturned Monday during pre-trial hearings. The case has huge ramifications in the digital music industry, given the pervasiveness of the MP3 format. Alcatel-Lucent has similar cases pending against other companies.

The co-owner of one of Alcatel-Lucent's patents, the European researcher organization Fraunhofer, had declined to join the suit because Microsoft was already legally licensing its MP3 patents. Microsoft had argued as much in February when the award was announced.

Alcatel-Lucent said it was disappointed in this week's turn of events and would appeal. However, even if the company wins its appeal, the damages award will need to be tried again. "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 issued late Monday.

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