Microsoft loses a $1.5 billion suit

Written by Brett Thomas

February 23, 2007 | 09:27

Tags: #mp3

Companies: #france #microsoft

Microsoft and its recent lawsuits have been quietly residing on the back pages of business sections everywhere for quite some time. Of these, the suit with the French company Alcatel has been the most curious - it sued Microsoft for the violation of MP3 patents since the format became playable in Windows Media Player back in 2000.

There is finally a resolution to that suit, at least until it's appealed - a federal jury has ordered Microsoft to pay $1.5 billion.

As can be expected, Alcatel is incredibly pleased with the ruling and Microsoft is rather unhappy. Alcatel has claimed throughout the suit that it is the real patent holder for MP3 technology, which Microsoft says that it licensed from a German company named Fraunhofer. At the time, Fraunhofer was considered the worldwide license holder, and sold Microsoft rights for $16 million

Though Microsoft was under the impression that it had proper clearance for the technology, a jury apparently decided otherwise. It handed down a $1.52 billion judgement against the company. This decision means that (at least without a successful appeal) Alcatel will be considered the proper holder for MP3 technology, meaning any company that did not pay it could be in the cross-hairs next.

Microsoft has asked that the judge decrease the financial aspects of the judgement considerably. If he complies, Microsoft may allow the suit to stand unchallenged - if not, the company plans to take it up with the Court of Appeals.

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