February 23, 2007

Yesterday, a jury at the U.S. District Court for the Southern District of California (San Diego) awarded $1.52 billion in damages against Microsoft Corp. for patent infringement. In a case brought by Alcatel-Lucent regarding two of its MP3 digital music file standard patents, the jury determined that Microsoft infringed the plaintiff’s patents, rejecting Microsoft’s argument that it had previously paid $16 million for a license for the technology from Fraunhofer Gesellschaft and that it had a right to continue to use the licensed technology in its products. Alcatel-Lucent alleged that Microsoft Windows Media Player, present in several recent versions of Microsoft Windows (including Vista), but according to the Bloomberg.com article (link below), the damages were based “on the hundreds of millions of computers sold worldwide that contain the Windows operating system, not the Windows software itself.” According to the Reuters article (link below), the $1.52 damage award “was based on 0.5 percent of the price of personal computers sold since around mid-2003,” and represents “about six weeks of cash flow or about 15 cents per share” for Microsoft. Damages were also awarded to the plaintiff’s based on overseas sales of infringing products, representing approximately half of the total damages awarded to Alcatel-Lucent. This award is approximately one-third of the damages Alcatel-Lucent was seeking from Microsoft in this case.

Reuters News Article: LINK
Bloomberg.com Article: LINK


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I am a patent attorney with Reichel IP LLC, where I concentrate my practice on patent drafting and prosecution, trademarks, and general intellectual property matters. I currently focus on the preparation and prosecution of medical device and other life sciences patent applications, and being actively involved in a number of local not-for-profit organizations.

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