Microsoft Patent Payment Overturned

A US federal appeals court has ruled that Microsoft doesn't have to pay $358 million in damages to Alcatel-Lucent. That said, the court also upheld a lower-court ruling that Microsoft infringed on an Alcatel-Lucent patent.

Microsoft was found to have infringed on an Alcatel-Lucent "Day patent," which provides a software-based interface for picking dates without a keyboard, as in a calendar utility. Microsoft's Outlook, Money, and Windows Mobile products were found to have used an interface that was similar or identical to the technique described in the Day patent.

The overturning of damages is due to a lack of lack of evidence to support the damages calculation, the court noted. And although it found the original jury-based award to be excessive, the court does believe that Microsoft should still be fined for its infraction. It has not specified a method by which a new damages award could be calculated but has asked the Federal Circuit to reconsider the penalty.

"Outlook is an enormously complex software program comprising hundreds, if not thousands or even more, features," the ruling reads. "We find it inconceivable to conclude, based on the present record, that the use of one small feature, the date-picker, constitutes a substantial portion of the value of Outlook."

Interestingly, Microsoft has suggested its own fine of $6.5 million for the infringement. Alcatel-Lucent first sued Microsoft in 2002 and had been seeking 8 percent of Microsoft's annual revenues for the infringing software products. (The original damages award appears to have been based on this figure.)

Alcatel-Lucent is a busy company, if you consider litigation as a source of income. The company has court dates planned with PC makers Dell and Gateway, both of whom are accused of also infringing on the Day patent. Alcatel-Lucent also has other unrelated in-progress patent disputes with Microsoft around the MP3 audio format and speech-compression technologies.

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