“Microsoft was ordered by a federal jury yesterday to pay $1.52 billion in a patent dispute over the MP3 format, the technology at the heart of the digital music boom. If upheld on appeal, it would be the largest patent judgment on record,” Saul Hansell reports for The New York Times.
“The ruling, in Federal District Court in San Diego, was a victory for Alcatel-Lucent, the big networking equipment company. Its forebears include Bell Laboratories, which was involved in the development of MP3 almost two decades ago,” Hansell reports.
Hansell reports, “At issue is the way the Windows Media Player software from Microsoft plays audio files using MP3, the most common method of distributing music on the Internet. If the ruling stands, Apple and hundreds of other companies that make products that play MP3 files, including portable players, computers and software, could also face demands to pay royalties to Alcatel.”
“Microsoft and others have licensed MP3 — not from Alcatel-Lucent, but from a consortium led by the Fraunhofer Institute, a large German research organization that was involved, along with the French electronics company Thomson and Bell Labs, in the format’s development,” Hansell reports. “The current case turns on two patents that Alcatel claims were developed by Bell Labs before it joined with Fraunhofer to develop MP3.”
“Thomas W. Burt, the deputy general counsel of Microsoft, said… the appeals process might take another year or two. He said he did not expect that the courts would force Microsoft to remove the MP3 functions from Windows,” Hansell reports. “Joan Campion, a spokeswoman for Alcatel-Lucent, …declined to comment on whether that company would pursue similar claims against makers of MP3 players, like Apple. An Apple spokesman declined to comment.”
Full article here.
MacDailyNews Take: This sounds worse than it will end up being for Microsoft. The same goes for other companies that — as pointed out by TheStreet.com’s Marek Fuchs — were brought into this issue by “one of Microsoft counsels, who is obviously trying to rally other companies to his cause by scaring the bejesus out of them. However, that does not have to define the story, especially because it’s about an issue that can be turned on appeal (many patents cases are) or could end up with some relatively modest royalty payments all around.”
Full article here.
Related articles:
Alcatel-Lucent’s landmark MP3 victory over Microsoft paves way to demand royalties from Apple? – February 23, 2007
Microsoft ordered to pay Alcatel-Lucent $1.52 billion for Windows Media Player patent infringement – February 22, 2007
Does it matter if the company uses LAME over Fraunhofer? If so, Apple should have gone with LAME like was originally stated.
With what I have read so far, I just don’t see how the jury could have made this decision. Maybe it’s another sign that juries in the U.S. have gotten out of control? For years now, I’ve called for the elimination of juries and the implementation of trial by a panel of judges. The average person is just too stupid and gullible for a jury system to work. My two cents.
Oh, what does all this have to do with Apple and the Macintosh platform? Nothing.
Have a good weekend!
Cubert
*the sound of Paul Thurrott crying and chairs being thrown
Yes, oligarchies are surely the way to go. Anyone for triumvirates? Anyone? Anyone? No? Dusssssst.
LAME may well be a “better” choice – both technically and legally – but it had no market presence at the time. Still doesn’t. It’s better to pay million$ and sell billion$ than to try to skimp and sell nothing.
That said, including LAME in addition to MP3 would have given Apple more by way of “wiggle-room”.
DLMeyer – the Voice of G.L.Horton’s Stage Page
Apple sells and distributes music in the AAC format; AAC and MP3 are not the same.
“For years now, I’ve called for the elimination of juries and the implementation of trial by a panel of judges. The average person is just too stupid and gullible for a jury system to work.”
Yeah.
What idiots the founding fathers were to think that would work. Especially at a time when the average citizen was uneducated, illiterate, and superstitiously religious.
Is much as I like to see MS slapped around, this lawsuit is garbage.
That said, I’m glad they sued MS first rather than Apple first. If MS wins, Apple wins but MS pays the legal fees!
Sometimes, you have to root for the enemy.
This is such a waste of time. Software patents should expire after five years.
This could be the reason for Jobs’ open letter about DRM-free music. Maybe it’s a way to show (or a deal) that Jobs is trying to support MP3 format, and therefore the licensing fees that would go to Alcatel-Lucent if MP3 became the standard. He is trying to keep Apple out of court by showing Alcatel-Lucent he backs their format. Being that Steve is so influential in the music industry, his words of support mean a lot to Alcatel-Lucent (more than Gates). If Alcatel-Lucent take Apple to court , I bet he will stop backing DRM free music.
There should definately be some kind of time limit on these frivolous lawsuits. For one thing all the companies followed the law and licensed there MP3’s and payed there fees. The judge that ruled on this case should have taken that into consideration as well as the fact that if Actel was to stupid to see two other patents they had from 15 years ago they shouldn’t be able to get any compensation for them anymore.
Macedsince84, I must be little dense today. Who sells MP3s with DRM?
I have not read anything less logical and more ill-advised this entire month than the call for eliminating trial-by-jury.
“I have not read anything less logical and more ill-advised this entire month than the call for eliminating trial-by-jury.”
Agreed, but then a very large number of the people I interact with every day appear to lack any cognitive abilities. I work at a university. Go figure. You wouldn’t believe the deafening silence when a class was asked “do we (in the US) live in a democracy or a republic, and what’s the difference?” No worries, it was only a broadcast journalism class. If it had been the law school I would have been worried.
I grin with scornful amusement whenever the iPod-iTunes universe mysteriously shifts from a proprietary, locked-in, monopolistic product offering to one that is suddenly liable for bogus patent royalties on a music file standard. And then I laugh and remember that human beings are idiots.
Tergenev – you’d be better off remembering that the iPod-iTunes universe uses two file formats. One you have to pay for, that is a proprietary, locked-in, monopolistic product; and the other that is liable for patent royalties.
ziggybop..
What I’m saying is that those companies using the mp3 technology would need to pay Alcatel-Lucent’s and the more companies using their technology the more licensing fees, right? Isn’t this why Micosoft has to pay them? Maybe I don’t understand, but ACC is not mp3, and if Jobs’ DRM free letter was followed it would push mp3 format since it is DRM free.
Cubert:
“
I’ve called for the elimination of juries and the implementation of trial by a panel of judges. The average person is just too stupid and gullible for a jury system to work. My two cents.”
i second you.
have a good weekend you too
Macedsince84, AAC is also DRM free. Apple’s DRM scheme is called FreePlay. AAC can provide the same audio quality as MP3 in a smaller package. I doubt the iTunes Store would ever sell MP3s, just turn off FreePlay in iTunes and eventually strip it from the millions of songs iTS sells. I believe even the Zune, as well as some other players, will play AAC files.
Reality Check –
Ah, but if there is, indeed, the OTHER format . . .then there is no such thing as a ‘locked-in’ format for the iPods. I make no argument against the potential risk that Apple faces over MP3 patents, other than the patent absurdity of computer software technology patents in general. No, I just think this highlights the absurdity of the Norwegian, French and German arguments that Apple must ‘open up’ it’s iPod-iTunes products. At least, it will, if Alcatel-Lucent decides to go after Apple for MP3 fees.
BTW, I firmly believe that the management at Lucent is no better than the management at SCO.
@ Culbert & entanglement
The only people I know who hold such attitudes are too stupid and gullible to realize that surrendering constitutional rights to authority (any authority) is not a good thing.
I’d rather trust my fate to a fully informed jury than relying on one to three so-called legal experts, who are more than likely to have hidden legal/political aspirations and/or agendas coloring their opinion and judgement.
I’ve called for the elimination of juries and the implementation of trial by a panel of judges. The average person is just too stupid and gullible for a jury system to work. My two cents.”
I’m with you on this one!
Trial-by-ordeal reduces time to trial, costs, prison overcrowding and the need for colonies like Australia. Think about it.
SLIGHTLY OFF TOPIC:
A couple of years ago I bought an Alcatel mobile (cell) phone and the bloody thing had “catastrophic software failure ” (technican’s words) two months after I purchased it. OK, so it was covered by warranty. Then six months later the same thing happened again.
One of my work friends worked at Alcatel for 12 years and he said they were a shocking company. They were always cutting corners to save money and one of those areas was Quality Assurance…it was almost non-existent.
I’ve never had a problem with any other phone manufacturing company other that Alcatel. And there’s only one company that I hate more than Alcatel and that’s Microsoft…but that’s another story altogether.
@nobodi,
Then I want a jury that is truly my peers – caucasian, male physicians (and cuboid, too). No bored, air-head, middle age housewives allowed!
I seem to get picked for jury duty every year, and I am always appalled by the mentality of some of the other potential jurors. I have also seen some pretty outrageous outcomes. Maybe that’s just being in Philly.