WASHINGTON, Sept 25 Alcatel-Lucent (ALUA.PA)
lost a fight to win back a $1.5 billion award against Microsoft
Corp (MSFT.O) when an appeals court ruled Thursday in favor of
the software giant in a battle over patents to digitize music.
A lower court jury in San Diego found in February 2007 that
Microsoft had infringed two MP3 digital music patents and
ordered Microsoft to pay $1.5 billion. In August 2007, U.S.
District Judge Rudi Brewster disagreed with that jury, saying
Microsoft had not violated one of the patents and had a license
for the other one. The judge threw out the jury's award.
On Thursday, the U.S. Court of Appeals for the Federal
Circuit, which hears appeals in patent cases, agreed with
"We affirm the lower court's grant of JMOL (judgment as a
matter of law) based on lack of standing for one patent and
based on non-infringement for the other patent," the court said
in its ruling.
The dispute centered on a 1989 joint development agreement
between AT&T and German research organization Fraunhofer
Microsoft maintained it obtained a license for the MP3
technology from Fraunhofer for $16 million and was innocent of
But Alcatel-Lucent argued the patent was based on work done
previously by Bell Labs, now the research arm for Lucent
Technologies, and could not legally be licensed by Fraunhofer
to Microsoft. Lucent was spun off from AT&T in 1996 and owns
MP3 is the standard digital music format, which allows
audio to be compressed so it can be easily played on computers,
mobile phones or digital music players.
Alcatel-Lucent said it had not yet decided on an appeal.
"We are disappointed with the Court's decision on this
matter," said spokeswoman Mary Ward. "We will review our
options to see what steps we should take."
(Reporting by Diane Bartz; Editing by Tim Dobbyn and Andre