Wednesday, February 21, 2007

Microsoft to Pay $1.52 Billion to Alcatel-Lucent in MP3 Patent Dispute

A U.S. District Court ruled in favor of Alcatel-Lucent in a patent dispute with Microsoft involving MP3 patent licensing. The court ordered Microsoft to pay $1.52 billion to Alcatel-Lucent, which argued that the technology used in Windows Media Player was developed at Bell Labs. Microsoft contended that its technology originally was developed by Fraunhofer in Germany.

Microsoft disputed the court ruling. In a press statement, Tom Burt, Microsoft's corporate vice president and deputy general counsel, stated: "Like hundreds of other companies large and small, we believe that we properly licensed MP3 technology from its industry recognized licensor -- Fraunhofer. The damages award seems particularly outrageous when you consider we paid Fraunhofer only $16 million to license this technology.

"Therefore, today's outcome is disappointing for us and for the hundreds of other companies who have licensed MP3 technology. 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."

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