Microsoft loses lawsuit filed by Alcatel-Lucent

Software giant Microsoft has suffered defeat in first of the six patent lawsuits brought by telecom giant Alcatel-Lucent.

A federal district court jury set damages on this lawsuit at $1.5 billion.

Microsoft said that the patents in question govern the conversion of audio into the digital MP3 file format on personal computers. Alcatel-Lucent had also filed 15 patent claims against PC makers Gateway and Dell in 2003.

Tom Burt, a Microsoft deputy general counsel added: “We think this verdict is completely unsupported by the law or the facts. We believe that we properly licensed MP3 technology from its industry recognized licenser — Fraunhofer. The damages award seems particularly outrageous when you consider we paid Fraunhofer only $16 million to license this technology.”

Alcatel-Lucent SA spokeswoman Mary Lou Ambrus responded: “We’ve made strong arguments supporting our view, and we are pleased with the court’s decision.”

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