The twisted story behind MP3 patents and Alcatel-Lucent’s $1.52 billion judgment against Microsoft

“It’s a German story, with a French twist,” John Shinal reports for MarketWatch. “In 1989, Karlheinz Brandenburg, an audio engineer and mathematician working for a research institute Germany’s Fraunhofer-Gesellschaft, was one of five men named on a German patent for a technology that could encode and play music in digital form.”

“In that same year, Brandenburg did related technology research with new colleagues at Bell Labs, then a unit of the former AT&T Corp., where he spent about a year before returning to his native soil,” Shinal reports.

Shinal reports, “Yesterday, lawyers for the French telecom-equipment maker Alcatel-Lucent won a $1.52 billion award by convincing a federal jury in San Diego that Microsoft Corp. violated Alcatel’s patents covering digital music.”

“Here’s the twist: the two patents mentioned above are not the same one. Alcatel-Lucent acquired the latter because it owns the rights to a lot of former Bell Labs intellectual property, while Microsoft — like Apple Inc. and dozens of other U.S. technology companies — licenses the former patent from Fraunhofer,” Shinal reports.

“Yet both are used in Microsoft’s Media Player software, at least according to the jury that made the award. That piece of software has been installed on millions of PCs and portable music players around the globe since the suit was first filed in 2004 — which helps explain the size of the award,” Shinal reports.

“Microsoft’s attorneys said they will ask for relief from the court on the award and, if necessary, appeal the verdict,” Shinal reports. “This will not be the last legal spat concerning technology that is commonly used in all sorts of consumer electronic gear. It’s not even the first.

Full article here.

Related articles:
Are MP3 patents really in upheaval after Alcatel-Lucent’s verdict over Microsoft? – February 23, 2007
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

7 Comments

  1. rasterbator said, “So Microsoft used the Lucent patent, but Apple and others did not. In a nutshell.”

    That’s not the situation at all. Probably all companies that allow MP3 files to be played in their software and maybe even hardware used the same basic technology, which Alcatel-Lucent has a patent on. Microsoft was sued because it was the biggest dog. Look for this to fall down the line to Apple, Sanyo, Creative, Sony, etc. And don’t forget manufacturers of home and car audio equipment, either.

    This is where patents will pay off for inventors now. In the past, you created something, patented it, and built a company to make the product or sold the patent or licensed it to one company.

    Now that new inventions are coming from the high-tech sector, someone creates something, patents it, and sits on the idea until another company wants to use the technology and either violates your patent or licenses it. The problem is that there are so many patents that are so closely related, companies will have difficulty in determining whether they have licensed all of the correct patents for what they want to do.

    That’s the problem with this case. Microsoft, Apple and most other companies thought they had licensed the MP3 technology. Now Alcatel-Lucent, probably as a result of their merger, dig in some old file cabinets and find out they have an MP3 patent, so they decide to make some money off of it. And perhaps legitimately so; however, it’s going to be scary for companies like Apple which develop new products or pull together existing technologies to be used in new ways.

    Remember how Steve Jobs said the iPhone was patented, patented, patented? Welcome to the next trend in CYA.

  2. “So Microsoft used the Lucent patent, but Apple and others did not. In a nutshell.”

    How did you come up with this? The article states that “Microsoft — like Apple Inc. and dozens of other U.S. technology companies — licenses the former patent from Fraunhofer”.

    How does this mean Apple is using a different patent than Microsoft?

  3. The article clearly states that MS and Apple, etc. use the Fraunhoffer patent. But MS was sued because it also uses patented Lucent technology. While the article states that Apple uses the Fraunhoffer tech, it may be possible that they do not also use Lucent tech. That explains Rasterbators “nutshell” comment.

  4. Feb.23 stuff. Click the related story link in the body of the text.

    “We don’t think these two [Alcatel-Lucent] patents have anything to do with MP3,” [Microsoft deputy general counsel Tom Burt] said in an interview. Instead, Burt asserted that the patents relate to the so-called AAC audio compression format….
    .
    .
    .
    Burt said that while Bell Labs came away from its joint research project with Fraunhofer with patents related to AAC, Fraunhofer came away with purely MP3 patents. “There’s lots of formats out there but the Fraunhofer people did mp3, and the Lucent/Bell team worked on something different,” Burt said.
    .
    .
    .
    The patents developed at least in part by Johnston were assigned to AT&T Bell Laboratories and Lucent Technologies, and were issued in 1994 and 1997, respectively.

    The first patent describes technology used for “transmission of signals and in recording for reproduction, particularly recording and reproduction of music,” while the second describes technology for encoding audio signals.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.