Apple Accessories, now at StaplesFebruary 22, 2007 1:16 PM PST
Microsoft hit with $1.5 billion patent verdict
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In its verdict, the jury assessed damages based on each Windows PC sold since May 2003. The case could have broader implications, should Alcatel-Lucent pursue claims against other companies that use the widespread MP3 technology.
An Alcatel-Lucent representative praised the ruling.
"We made strong arguments supporting our view, and we're pleased with the court's decision," spokeswoman Mary Lou Ambrus said.
In a statement, Microsoft Deputy General Counsel Tom Burt said the software titan believes that the verdict "is completely unsupported by the law or the facts."
"We will seek relief from the trial court, and if necessary, appeal," Burt said.
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. That case, currently before the Supreme Court, deals with whether overseas sales of software products should be subject to U.S. patent law.
Microsoft said it believes that it properly licensed MP3 technology from Fraunhofer, paying that company $16 million. Fraunhofer, which helped develop the MP3 compression technology along with Lucent's Bell Labs, has licensed its intellectual property to companies that want to use the audio format in their products. Fraunhofer has since handed the MP3-licensing duties over to Thomson.
Scores of technology companies, including Apple, Intel and Texas Instruments, license the MP3 technology, according to Thomson's MP3licensing.com. An Apple representative declined to comment on the verdict.
"Therefore, today's outcome is disappointing for us and for the hundreds of other companies who have licensed MP3 technology," Burt said. "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."
Alcatel-Lucent's Ambrus declined to say whether the company might pursue other companies that use MP3 technology in their products.
The ruling could spur Alcatel-Lucent to seek royalties from other companies, said Andrew Leibnitz, an intellectual property lawyer for Farella Braun and Martel in San Franisco.
"Given this verdict, it wouldn't surprise me if Lucent is even more aggressive in the marketplace about licensing its patents, but it has always been aggressive," Leibnitz said. Leibnitz earlier represented Dolby Labs in a patent dispute over whether one of Dolby's audio codecs infringed on Lucent patents.
While the ruling was large, Leibnitz said some of that is simply by virtue of Microsoft's size. "Anytime Microsoft gets sued, it can be a serious amount of damages at stake, especially when it relates to Windows."
The case dates back to 2003, when Lucent sued PC makers Dell and Gateway over their use of the audio technology. Microsoft stepped into the legal fray and has been embroiled in a widening legal battle with Lucent (now Alcatel-Lucent) ever since.
The jury verdict Thursday relates only to a portion of Alcatel-Lucent's patent claims. Microsoft has also countersued in the case, and there have been additional actions in other legal venues, including an International Trade Commission case filed this week.
"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," Burt said. "We will continue to defend our customers against unfounded claims and are pursuing a number of patent claims against Alcatel-Lucent, including the International Trade Commission case filed earlier this week."
Leibnitz said he expected a protracted fight. "I don't think this is the end of this fight by far."
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Alcatel, Lucent Technologies Inc., verdict, intellectual property, patent
74 comments
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From the article, it's not clear where Alcatel/Lucent even came into this picture and why the court wound find in their favor.
"Microsoft said it believes that it properly licensed MP3
technology from Fraunhofer, paying that company $16 million.
Fraunhofer, which helped develop the MP3 compression
technology along with Lucent's Bell Labs, has licensed its
intellectual property to companies that want to use the audio
format in their products. Fraunhofer has since handed the MP3-
licensing duties over to Thomson."
Seems clear to me.
One thing the story doesn't indicate is what concept is Lucent claiming. Perhaps this just relates to something specific Microsoft does with MP3 processing, but if not, the implications could be that all people making MP3 playback software/hardware could be at risk now.
Now although it was a colaboration between Fraunhofer ATT and Thompson. The righful patent owner is Fraunhofer.
Its a bit of twisting of patent laws, that Lucent Suddenly issued a patent then had it back dated to before the Fraunhofer patent.
But heck, when you company is in trouble heck I quess it never hurts to play like this.
So now I assume all people who license MP3 from Fraunhofer will now also have to pay an additional fee to Lucent?
that you turn over your illegal mp3 player. This is the way it works
these days.
the license for the US and payed other company's for the non US
use of the technology.
The law states that every box or product that gets shipped out
also has to be payed for except when its a blueprint to other
manufacturers. For MS the master DVD is a blueprint but Lucent
thinks otherwise. In effect all US based company's would have to
pay a US license for US and overseas sales added to the licenses
it already pays to company's for other country's.
Its sick but i love it, a lot of company's will escape the US for this
law alone. USofA is one sick country, come to mainland Europe
and live the genuine freedom we have instead of make believe.
Hint: Its not. It contains the final product for reproduction.
No company is going to leave the US of A over this.
Its all PR lobbying.
And living in Europe vs the US? LOL... all you're doing is trading one set of problems for another.
Oh, and on the sick note, how many radical terrorists does one country (France or UK) have to let into their own borders before they realize they have a problem? Nowhere in the west is there more hate and filth being spewed than by so-called "religious" leaders in Europe. In Kosovo, ostensibly still part of Serbia (though the UN is working to change that...not for the better....), there is a rapidly growing cult of the Wahhabi radical Islamic sect...and it is a cult.
Anyone who advocates violence in the name of religion is a nut that belongs to a cult and is not smart enough to pull his or her head out their a**...whether that cult is Christian (David Koresh / Timothy McVeigh / the IRA) or Islamic (too many to even start naming). So, tell me why again, would I move from a rather free society, that is also much more free of these nut job radical "religous" freaks, to a place where my personal freedom, cost of living, and other forms of enjoyment are curtailed. By other forms of enjoyment, I mean sports and computers (never seen such slow Internet in the "civilized" world). By sports, I mean that watching soccer, or football...not the real kind, is so retarded and boring that despite having played it for 16 years, much of it at a high level, I cannot even watch the Euro-sissies play anymore....who wants to watch diving and acting. I can watch ballet or the basketball...another sissy sport...and see that. For real sports, I want hockey and REAL football, not some bunch of pansies who hit the ground screaming like a baby if someone sneezes towards them.
So, go back to your sniveling little socialist hole and quit disparaging the greatest country on Earth. Sure, we're not perfect in the USA, but we're far better than the snobs in Europe.
I have always thought that rectal medicine is good for a bully.
I'm hoping Ballmer is smart enough to see that, today's case in the USSC, and actually think that maybe the whole software patent thing isn't such a good idea after all?
If this keeps up, all those vague and empty threats Ballmer has been mouthing in Linux' direction won't mean much.
(Yes, MSFT has a metric ton of cash on hand, but a billion and a half equals (roughly) 6% of their total cash on hand, 12% of their total operating cash flow, and 15% of their current year-on-year Net Income (Q1/06 to Q1/07) at this time. Now imagine where that money is going to actually come from... obviously not Petty Cash).
/P
This is similar to the attempt Compuserve made nearly 20 years ago to sue anyone for the use of the GIF file format without paying a licensing fee first. I don't see it happening.
How many iPods have been sold to date? That's a heck of a lot of fines. While a $1 billion dollar fine is small to Microsoft, it could kill other companies such as Apple who would have to pay on every iPod and Macintosh OSX product ever sold.
This is a very dangerous precedent and all the companies need to band together to stop this.
By the way how much have you contributed to charity in the last year? Why don't you think of all the good things that not only Bill Gates but also others like him, like the Kroc's, who started Mcdonalds, have done.
"ALL this money changing hands why don't they concentrate more on helping others less fortunate. Nooooo they want it all in their own pockets and screw the rest." Bullsh*t
Do some research before you tear into someone who has given plenty back to society already (hes still giving). One more thing he is romured to be stepping down from his fulltime work at MS to work fulltime in the foundation too. He'll probably still stay on as a consultant but still what have you or for that matter most of us dont to compare?
mp3 is a mathematical algorithm. Nothing more.
Mathematical algorithms can not be patented. All software are nothing more then a collection of algorithms. Software patents should not be allowed.
Copyright is all that is needed to protect specific implementations of a collection of algorithms. Patents stifle innovation and competition.
Knowledge belongs to all, because all knowledge builds on other previous knowledge. Restricting knowledge in the form of the very oxymoron-ic title of IP is the very opposite of what got mankind as far as we have gone.
Hiding it from others, just to be greedy will slow down the march of progress, for the worse. This sort of thing along with the unethical actions of giants like MS are the reason computing has not advanced much further.
>"All software are nothing more then a collection of algorithms."
The works of Shakespeare are nothing more than the same 26 letters repeated and reordered.
A painting is nothing more than some paint spilled on a canvas in a specific manner.
Humans are just slight variations in a DNA sequence.
Software is just a bunch of 1's and 0's, but placed in a specific order.
If I shoot and kill you I am only using a ball of lead to displace some carbon and water.
if everybody can be sued for using mp3s... we have wma and ogg left. It just takes an anti-DRM FUD campaign for ogg to be left standing alone.
Oh, and it's free software ...
It's about time to make the switch.
<a class="jive-link-external" href="http://www.xiph.org/" target="_newWindow">http://www.xiph.org/</a>
Let's hope there ain't an obscure patent lurking in the shadows ...
top dog. They are dominant in the world of computers. But will
Microsoft survive? Sadly, they will. They've got a war chest of
funds for atleast 20 of these lawsuits. (put together even)
But does Microsoft care about losing 1.5 billion? No. I believe it
actually works out in their favour. I really don't believe they care
much for the MP3 format. They'd just as soon toss it and replace
it with WMA, if they had it their way.
But Apple on the other hand can very well be crippled by this
type of lawsuit. Dating back five years to the first release of
Itunes. Not to mention every iPod sold since its inception. Not to
mention Quicktime's use of MP3s in Mac OS X and OS 9.
Hopefully this lawsuit won't snowball past Microsoft.
made in the US. To compensate that MS would have to
aggressively pursue all there patents to make a profit out of it.
wait there bigger money suing all these companys then suing one small company for given the paid license to other for the use of MP3
First, regardless of what you think about the current patent system, you can't have your cake and eat it too. Microsoft is just as guilty as any of the other large companies that have abused software patents so they don't have any room to squirm.
But what Microsoft doesn't like is the fact that they are on the hook for international sales. That is what they are going to for an appeal.
From an outsider's perspective, the judge was right to include the overseas sales as part of the damages. When the laws were drafted, the world was less of a global marketplace.
record for the patents (which don't cover the
MP3 format, or decoding, but rather the specific
psychoacoustic model and algorithm for the audio
compression). Microsoft and others have
dutifully identified the licensor and licensed
the technology in good faith.
So, how is this willful infringement? It would
seem to me that Lucent's real beef ought to be
that its partner hasn't been sharing the
profits, or has been licensing the technology
without proper agreements between them and
Lucent.
I'm pretty sure that this won't hold up, but if
it does it will set a fundamentally bad
precedent.
Incidentally, the patents cover a very specific
aspect of the compression method, so it affects
encoders, not decoders/players. Also, not all
MP3 encoders use the model described in the
patent (LAME is a good example), so it is still
possible to encode MP3s without violating the
specific patents.
may have to.
I doubt that the entire industry and the courts are going to let
Alcetel sue them over this especially when companies have been
paying licensing fees in good faith. It would have the potential to
bring the entire computer sound industry to it's knees in one fell
swoop.
That being the case the verdict against Microsoft will likely be
set aside if not reduced drastically, but having got the verdict in
the first place, gee ain't karma a *****!
(I'd vote for using Ogg Vorbis, personally!)
I'm sure MP3's fate will be just as glorious.
(what's the emoticon for dripping sarcasm?)