“Microsoft Corp. should pay Alcatel- Lucent $1.52 billion, a federal jury said, deciding the world’s biggest software maker used digital music technology without permission and handing down the largest patent ruling in history,” Jeff St.Onge and Bill Callahan report for Bloomberg.
St.Onge and Callahan report, “The San Diego jury said Microsoft infringed two Alcatel- Lucent patents related to the standard for playing music files on a computer. Alcatel-Lucent accused Microsoft of infringing the patents with its Windows Media Player, including the version in the new Vista operating system.”
“The jury found that Alcatel-Lucent is entitled to more than $759 million for each of the two patents found to be infringed. It also upheld the validity of the patents. The jury of eight men and one woman began weighing the case Feb. 15, a day after lawyers made final arguments in a 12-day trial,” St.Onge and Callahan report.
Full article here.
Microsoft. The hits just keep on comin’!
Related articles:
Microsoft settles embarrassing antitrust suit in Iowa – February 14, 2007
Bill Gates unhinged with Apple envy; Microsoft on path to become high profile casualty – February 06, 2007
TIME Magazine: Microsoft’s Windows Vista ‘an embarassment to the good name of American innovation’ – February 02, 2007
No midnight lines for Microsoft’s badly faked Apple Mac OS this time – January 30, 2007
Bill Gates lists Microsoft ‘innovations’ that Apple has offered Mac users for years – January 30, 2007
Pioneer Press: Windows Vista shows ‘Apple is an innovation engine; Microsoft, not so much’ – January 29, 2007
Microsoft: The Redmond Copying Machine – December 20, 2006
Dave Winer: ‘Microsoft isn’t an innovator, and never was – they are always playing catch-up’ – December 01, 2006
Microsoft Windows Vista developers used Apple Macs for inspiration – November 27, 2006
Does Microsoft put drugs in the water supply? – November 19, 2006
What does this mean for digital music?
Altho I can’t stand MS, I think this was a bad decision by the jury. I believe most MP3 implementation licenses come through the Fraunhofer Institute. Alcatel is just now suing for something that implementers thought they were properly licensing.
In any case, it looks as if the jury fined MS two dollars per OS copy (including those pre-loaded onto new computers) sold. So if Apple is also guilty, then that should come to about 50 to 60 million dollars.
Legal or illegal?
The article doesn’t have enough specifics about the actual patent, but it sounds like another fishy lawsuit to me. Here’s Lucent, a failed company, trying to prove it’s a successful by generating revenue via patent lawsuits.
As much as I’d like Microsoft to get whacked again, this sounds like a bad ruling by the jury. MP3 is a licensed format (not “open” as many people seem to mistakenly believe) and it does appear Microsoft did pay the licensing fee to Fraunhofer. Alcatel-Lucent seem to think somehow they own the patents on MP3.
Has Apple licensed something from Alcatel- Lucent? If not, how is Apple somehow immune from the same thing? What if they go after Apple for every Mac and every iPod ever sold sold?
No offense, MDN, but you are a f*cking idiot. This isn’t just shit on Microsoft’s face–this is going to cost Apple as well.
Read: http://seattlepi.nwsource.com/business/303941_msftalcatel16.html
in conjunction with the story you linked.
Microsoft licensed MP3 from Fraunhofer through a contract with Thomson. The suit wasn’t originally Lucent v. Microsoft, but rather Lucent v. manufacturers who had licensed Windows, with Microsoft jumping in because it had a duty to defend the manufacturers under its contracts with them.
The jury decided that Fraunhofer had used some shenanigans to deprive Lucent of rights to the MP3 standard Lucent developed with Fraunhofer by back-dating a patent.
Basically the same thing as deciding that you and buddy owned a car together, that someone had rented it by paying only your buddy, and now you were owed your share.
Now, dear poor stupid MDN, please go to iTunes and hit “About iTunes” What do you see? Hmm? MPEG Layer 3–the exact technology in this case–licensed from Thomson and Fraunhofer, same as what Microsoft just got nuked for.
And your dumb ass thinks this is a good thing?
What this decision means is that Lucent/Alcatel now will be demanding a piece from Apple of every copy of iTunes, and every iPod sold, as well as every iPhone that Apple will sell.
So unless Apple has a contract to license mp3 from Lucent buried in a desk somewhere, there’s a hit for you, shit for brains.
Precisely what I was afraid of.
I’ll don’t share OpJ’s level of anger’s at MDN’s take, I have to agree that MDN clearly needs to revise it.
This is not a case where Microsoft rolled over a competitor, stealing their technology in the process (Stac, DR-DOS, etc). This is a case where some failed company somehow manages to convince a jury that it is the rightful heir to the MP3 format, despite the fact that Fraunhofer via Thomson is recognized worldwide as the valid patent holder.
I enjoy MDN for its partisanship, but this is a case where the editors clearly did not think things through before posting. In other words, cheering this ruling is like cheering at seeing your arch enemy being mowed down by a machine gun, without realizing you are yourself standing in front of the gun.
Wow it could NOT have happened to a more deserving bunch of thieving whores?
Too bad it wasn’t 15 Billion. Up Yours Microslop!
As an AAPL and MSFT shareholder, I have to say that I’m much happier with situation that AAPL is in regarding the license arrangment, versus the situation that MSFT is in.
“…I have to say that I’m much happier with situation that AAPL is in regarding the license arrangment…”
Why is that, if I may ask?
If Apple is in the sites of Alcatel-Lucent, then they aren’t going to be alone…
http://mp3licensing.com/licensees/index.asp
For some background on mp3…
http://mp3licensing.com/mp3/index.html
It seems to me that Alcatel-Lucent should have gone after Fraunhofer and Thomson, rather than companies (even MS) who, in good faith, thought they were licensing from the patent holders.
But, after researching things a bit, I’d say that as far as Alcatel-Lucent is concerned there obviously wasn’t any money in that.
As percentage of earnings, MSFT is paying a higher premium for the license. I really don’t care how much it is costing per copy of a “disk”. My only concern is how much it impacts my ROI.
nd that is what share prices are based on (
“If Apple is in the sights of Alcatel-Lucent, then they aren’t going to be alone…”
They’ll certainly have the biggest bulls-eye on their back, however.
Infact if I’m Alcatel-Lucent, barring an already standing agreement or current talks, I’m on my way to Cupertino as we type.
leodavinci, M$ was certainly not acting in good faith, heh. They *clearly knew* who had the real patents, but they decided to go to Fraunhofer and Thomson so they could cheap out as usual. They deserve every penny of this loss, and I hope they exhaust their appeals extra-quick.
ROFL!
Has anyone got a brain at Microsoft???
LOL – they think they can just copy/use anything with permission and get away with it.
What a bunch of idiots.
No Zune tang comments???
Oh dear – not even the crack addict that is Zune tang can spin this one around to Microsofts benefit.
Just goes tos how, even the paranioa of Zune Tang and his squirting pile of shit cant work this one out.
Welcome to the Mac social Zune.
Uh, the last few poster – you guys are embarrassing yourselves.
As has already been pointed out by multiple posters, Apple itself licenses MP3 from Thomson and Fraunhofer! Apple did NOT license it from Alcatel-Lucent. Just go to your “About iTunes” for the proof.
In fact, I doubt there is a single company that has licensed MP3 from Alcatel-Lucent because everyone has licensed it from Thomson and Fraunhofer!
Gee, what does it cost to get a brain around here? Maybe some Mac users aren’t stereotypically rich, huh?
This was a bad ruling that will affect everyone in the space, from Microsoft to Apple to Real. If you gleeful posters can’t comprehend the facts of this case, then I suggest keeping one’s mouth shut to avoid looking like an idiot. This affects Apple too because Alcatel-Lucent just set a legal precedent that says the MP3 patent belongs to them and not to Thomson and Fraunhofer.
Perhaps M$ should go after Thomson and Fraunhofer and get the money back.
It’s okay, it’s okay. You can feel schadenfreude about the ruling against Microsoft today and outrage about a future lawsuit against Apple. It’s like indulging at Christmas and restraining yourself after January 1. Real MDN readers will be able to feel both simultaneously – a kind of platform DID [Dissociative Identity Disorder]. So long as you’re aware of it.
I think Apple is safe on this one…
http://en.wikipedia.org/wiki/Advanced_audio_coding
Microsoft will certainly appeal. No one writes a check for 1.5 billion dollars with a grin on their face.
Why would Apple be safe on this one?
Apple has distributed millions of computers, copies of iTunes and iPods that code and decode mp3, and it would be almost impossible to market music playing hardware and software in the future that doesn’t play mp3 given the huge libraries users have of mp3 encoded music.
How does the fact that they also use AAC help Apple, pray tell?
The fact that Apple uses one codec that doesn’t require royalties has nothing to with any obligation to pay royalties for another codec.
. . . all the way up to God. I can’t understand how it lost. I guess it didn’t bribe the right people.
I’d love to see some other huge entities screwed to the wall, particularly TV networks, TV and radio stations, and online newspapers that use WMP exclusively. There might be a few execs at the BBC wondering what the future might hold for its sugar daddy.
No doubt, many people, including Apple, are frantically looking in old documents to determine from whom they purchased their licenses(s) for mp3: Thomson, Fraunhofer, and/or Alcatel-Lucent. I would like to know who are Thomson and Fraunhofer, and what their actual relationships are or were with Alcatel-Lucent.
Is the whole world mad for patent litagation, or has arrogance rotted the brains of business?