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Microsoft to Pay $1.52 Billion in Patent Suit Damages
An anonymous reader writes "A U.S. federal jury found that Microsoft Corp. infringed audio patents held by Alcatel-Lucent and should pay $1.52 billion in damages, Microsoft said Thursday. The news comes after reports that U.S. Supreme Court justices expressed doubts about whether Microsoft Corp. should be liable for infringing AT&T Inc. patents in Windows software sold overseas."
The actual case is actually not half as interesting as Microsoft's and the Justice Department's arguments that source code isn't patentable. "I think the reason that's not relevant here is that the patented invention in this case is not software," [Assistant Solicitor General Daryl ] Joseffer said. "It's computer that has software loaded into it. And the components of a patented invention do not themselves have to be patented." Justice Alito's next question indicated his astonishment. "If these computers are built abroad and are sold with Windows installed, the component is the electrons on the hard drive? That's your position?" Joseffer responded yes, that's the US' position, but no, that's not AT&T's position. "It's the physical embodiment of the software which in some instances is manifested by -- by those electrons," said Joseffer, perhaps broaching for the first time in history the topic of whether electrons are patentable. "Now AT&T's contrary view is that the abstract code in the abstract is the component. The reason that can't be, is that object code in the abstract is just a series of 1's and 0's. In theory I could memorize in my head or write down on a piece of paper. But that's not going to combine with other, with other parts to make a patented invention."
While $1.5 billion is a lot of money, even for Microsoft, if they can use patents to keep competitors from challenging their dominance it's still good for them.
AT&T Corp. and Fraunhofer agreed in 1989 to develop MPEG-1 Audio Layer 3 technology, now called MP3. Scientists from AT&T's Bell Labs collaborated with Fraunhofer before AT&T spun off the unit in 1996. Bell Labs became Lucent Technologies Inc., which Alcatel SA acquired last year.
Microsoft accuses Lucent of deceiving the U.S. Patent & Trademark office by having one of the patents reissued and backdated to 1988, removing it from the scope of the 1989 deal with Fraunhofer.
I HATE to play devil's advocate here, particularly in defense of (yeck!) Microsoft. But (for those who actually read TFA) if MS purchased licensing for mp3 from Fraunhofer, then they actually did the right thing. Fraunhofer, evil as they are, have had the stranglehold on mp3 since day zero.
IMO Alcatel-Lucent have just successfully scammed some quick $$ off MS.
Worse! it also means MP3 players are unlicensed and you'll now have to use AAC. Too bad for everyone who locked themselves in to a proprietary non_DRM format that will soon lack any new players. Seriously... Can you imagine that ipods are immune to this lawsuits consequences?
Some drink at the fountain of knowledge. Others just gargle.
This was posted by an AC earlier, which apparently nobody saw; so let me attempt to be loud enough to get heard.
This is a bad thing. B-A-D.
Many, MANY companies have this same deal with Fraunhofer. MS is only the first to be sued. It's very likely that those companies large enough to be worth suing will also be sued in large numbers, after this. The fact that you guys hate MS so much you consider many, many companies getting sued a "haha" matter shows you have a profoundly sick sense of humor.
You have tried to support your argument with faulty reasoning! Go directly to jail; do not pass Go, do not collect $200!
That wasn't the point, as I read it. The point is that there may be a strong incentive to make players that don't support MP3 because it's encumbered and the owners doing the encumbering seem willing to exercise the ownership of their patent. In other words, there may be a shift to non-mp3 formats (AAC or say, ogg) for more players, and possible waning of MP3 domination due to incompatibility on players that don't support MP3 to keep cost down.