Alcatel-Lucent vs. Microsoft MP3 patent dispute

In the case of Alcatel-Lucent vs. Microsoft dispute in February of this year Microsoft was ordered by a federal jury in the federal district court in San Diego, CA to pay $1.52 billion to Alcatel-Lucent in a patent dispute over the MP3 format. To date this was the largest patent judgement and Microsoft appealed that judgement.

The issue was about two patents that Alcatel claims was developed by Bell labs before it joined Fraunhofer (Fraunhofer is a large German research organization) to develop MP3 technology, but Microsoft argued that one patent in question did not apply to its MP3 software and that the other was included in the Fraunhofer software for which it paid $16 million as license fee and so Microsoft appealed the verdict to pay $1.52 billion.

Yesterday the US federal judge Rudi M. Brewster overturned the $1.52 billion fine imposed on Microsoft, stating that Microsoft Window Media Player software does not infringe one of the patents and for the other patent Microsoft had already paid $16 million as license fee to Fraunhofer. Had the earlier verdict been upheld it would have affected the widespread use of MP3 format and the music industry.