Record Patent Fine and Other Legal News

A jury has fined Microsoft US$1.52 billion-the largest patent-infringement fine ever recorded-for infringing patents held by Alcatel-Lucent in the area of digital music, but the fine could be reduced or eliminated on appeal. A judge threw out one of Alcatel-Lucent’s other patent-infringement claims against Microsoft, but several other claims between the companies are still outstanding. Also in early 2007, Microsoft was threatened with further fines by the European Union (EU) for lack of compliance with its Mar. 2004 antitrust order, faced new complaints about lack of compliance with its 2002 antitrust decree with the U.S. Department of Justice (DoJ), was struck by a trademark-infringement suit over Office Live, and settled a class-action antitrust suit filed on behalf of Iowa consumers.

US$1.52 Billion Fine

Lucent (formerly Bell Labs) and Microsoft have been in a complicated legal fight over patent-infringement since Apr. 2003, when Microsoft intervened on behalf of OEMs Dell and Gateway, whom Lucent sued for infringing on 13 patents related to audio and video coding/decoding (codec) technology, position-sensing styluses, and touch-screen technology. Subsequently, in Apr. 2006, Lucent filed a patent-infringement claim over video decoding technology in the Xbox 360. That November, shortly after Alcatel completed its acquisition of Lucent, the combined company filed another set of patent-infringement claims against Microsoft over video decoding technology used in Microsoft’s IPTV platform. Over the course of the dispute, Microsoft has filed at least two countersuits alleging that Alcatel-Lucent infringes on 14 of its patents.