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August 6, 2007

Judge reverses Microsoft verdict, was largest in history

Posted by Benjamin J. Romano at 5:32 PM

Time to reset the record books -- at least for the moment. A San Diego judge today reversed the $1.52 billion jury verdict Alcatel-Lucent won against Microsoft in a patent dispute.

At issue were two digital music patents owned by Alcatel-Lucent, but originally granted to Fraunhofer Gesellschaft, a German company.

In post-trial motions, Microsoft had asked U.S. District Court Judge Rudi Brewster to reverse the verdict, order a new trial or dramatically reduce the damage award.

The judge ruled that Windows Media Player does not infringe on one the patents, and Microsoft had properly paid Fraunhofer to license the other one.

Alcatel-Lucent intends to appeal.

In a statement issued this afternoon, Brad Smith, Microsoft's general counsel, called the ruling "a victory for consumers of digital music and a triumph for common sense in the patent system."

He went on to note that this clarifies a murky legal situation that threatened many other companies who use the patented technologies at issue in the case. Alcatel's victory had raised the possibility it could pursue similar action against other companies that have licensed the technology from Fraunhofer. There were 454 "licensed companies" listed on the Web site mp3licensing.com, which is affiliated with Fraunhofer. They include Apple, Intel, Motorola, Nintendo, RealNetworks and Sony.

"For the hundreds of companies large and small that rely on MP3 technology, the Court's ruling clarifies that these companies have properly licensed the technology embodied in the '080 patent from its co-owner and industry recognized MP3 licensor -- Fraunhofer," Smith said.

Oh yeah, and for the record, the largest jury verdict ever was $925 million won by Polaroid against Kodak in 1991.

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Tricia Duryee
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