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Alcatel-Lucent draws big buckets of blood in continuing legal battles with Microsoft

Microsoft must pay $1.52 billion for infringing on two Alcatel-Lucent patents involving MP3, a San Diego federal jury ruled today. This is the first of six patent lawsuits brought by Paris-based telecom equipment maker Alcatel-Lucent. Microsoft intends to “seek relief from the trial court, and if necessary appeal.”

The lawsuit contends that Microsoft violated Alcatel-Lucent’s patents with its use of MP3 technology used to play music on Windows Media Player. Microsoft’s argument is that it legally licensed MP3 technology from the Fraunhofer Institute for $16 million.

“We think this verdict is completely unsupported by the law or the facts,” said Tom Burt, a Microsoft deputy general counsel. “We believe that we properly licensed MP3 technology from its industry recognized licenser - Fraunhofer. The damages award seems particularly outrageous when you consider we paid Fraunhofer only $16 million to license this technology.”

 “We have made strong arguments supporting our view, and we are pleased with the court's decision,” said an Alcatel-Lucent spokeswoman.

This lawsuit stretches back to 2003, when Lucent filed 15 patent claims against Gateway and Dell. Microsoft later agreed to replace those defendants, saying it got involved because the patents were closely tied to its Windows operating system, reports Reuters.

MP3 isn’t the only technology that Alcatel-Lucent is suing Microsoft for patent infringement. In November 2006, Alcatel-Lucent filed a lawsuit against Microsoft for infringement of seven video technology patents, likely because of the Xbox 360.

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By thebrown13 on 2/22/07, Rating: 0
RE: Lame.
By Bluestealth on 2/22/2007 9:21:52 PM , Rating: 3
Why would you go from MP3 to WMA? instead of Ogg Vorbis etc.. most WMAs sound like crap it is only the most recent codec that even sounds good.

RE: Lame.
By thebrown13 on 2/22/07, Rating: 0
RE: Lame.
By sprockkets on 2/22/07, Rating: 0
RE: Lame.
By tuteja1986 on 2/22/2007 11:24:21 PM , Rating: 1
This is a joke right 1.52billion. Geese Zune market isn't even worth 1.52billion. They haven't even sold 1million zune for that matter which would make at most $250million dollars. If Microsoft pays this fine then i will be very horrified at the stupidity of patent law. I thought euro court were asking for too much from Microsoft but this fine goes way beyond anything imaginable.

RE: Lame.
By frobizzle on 2/23/07, Rating: -1
RE: Lame.
By the taxman on 2/23/2007 8:29:11 AM , Rating: 1
yeah lol but seriously why would you want to not play with mp3s anymore they are getting sued for making a program that runs them not the mp3s themself but i always have used mp3 i like it the most of the formats... and i doubt mac isnt guilty for this with itunes so is mac gonna get hit next

RE: Lame.
By TomZ on 2/23/07, Rating: 0
RE: Lame.
By miekedmr on 2/23/07, Rating: 0
RE: Lame.
By sprockkets on 2/23/07, Rating: 0
RE: Lame.
By bigboxes on 2/23/07, Rating: 0
RE: Lame.
By miekedmr on 2/23/2007 10:50:07 AM , Rating: 3
WMA may sound fine to you, but it's still a crappy codec. (maybe not in its latest version)

The fact is, 128kbps mp3 sounds fine to most people, because they don't listen that hard and they play it through crappy speakers anyways.

RE: Lame.
By thebrown13 on 2/23/2007 1:01:16 PM , Rating: 2
I produce music in my spare time and I consider myself an audiophile.

WMA is awesome.

RE: Lame.
By BladeVenom on 2/23/2007 5:25:24 PM , Rating: 3
Good for you in overcoming your deafness to produce music. It worked for Beethoven.

RE: Lame.
By ElJefe69 on 2/25/2007 2:09:37 AM , Rating: 1
pwnd :)

atrac is a hell of a lot better than mp3, wma, etc. yeah no one uses it besides the people who produce broadway shows and psychologists in research (me!)

mp3's at 256k or below sound TERRIBLE on a real system. wma sounds crappy on one as well. icky.

RE: Lame.
By nomagic on 2/22/07, Rating: -1
RE: Lame.
By neothe0ne on 2/22/2007 10:12:32 PM , Rating: 2
Any audiophile (such as myself) would say you're wrong. Give me ANY lossy WMA, and I can immediately differentiate it from an mp3 of the same song. WMA has a special echo that I can recognize instantly (it just so happens this same echo annoys me very greatly). LAME VBR-new is where it's at (and AAC 128kbps, but only iPod users would be able to use the format practically).

RE: Lame.
By masher2 on 2/22/2007 11:07:01 PM , Rating: 3
That's what they call it the placebo effect.

RE: Lame.
By tk109 on 2/23/07, Rating: -1
RE: Lame.
By sprockkets on 2/23/2007 11:15:59 AM , Rating: 2
If they used flac, they wouldn't have to waste time with licensing fees. Then again, is da bomb with supporting every competant format and then some, even different forms of mp3, as I'm sure most people here know.

RE: Lame.
By Xenoid on 2/23/2007 2:13:26 AM , Rating: 2
Audiophile is defined as "ridiculous music snob that isn't classy enough to be a wine snob".

RE: Lame.
By probedb on 2/23/2007 5:35:38 AM , Rating: 3
Yes and 'audiophiles' can hear the difference between cables that cost $40 and $40.01....that tells us all we need to know about 'audiophiles'! Load of crap. You are right in the fact that when things are encoded at certain bit rates then you probably cannot tell the difference it's just that WMA isn't the codec of choice for many people.

Try reading if you're really interested in audio and sound quality etc...

RE: Lame.
By miekedmr on 2/23/2007 11:04:15 AM , Rating: 2
You're right, there are people that fit that stereotype. They buy gold plated cables thinking it makes music sound better, and tube amps despite solid state amps being measurably better and uncolored. They love calling themselves "audiophiles" too.

Then there are some people like amateur recording artists, musicians, or just enthusiasts who actually pay close attention to the quality of audio reproduction and have the sensibility to not heavily depend on subjective listening or buy placebo-dependant junk.

I have seen real evidence comparing codecs that pretty much concluded WMA is garbage, and through a good set of headphones, it's pretty obvious. It's been a while since I've touched it or looked into it, but... While any codec at high bitrate is more than acceptable, when I encoded WMA to 128kbps, anything treble was mangled with artifacts that were very uncomfortable to listen to. MP3's don't sound too good at that bitrate, but at least they aren't painful...

RE: Lame.
By michal1980 on 2/23/07, Rating: -1
RE: Lame.
By miekedmr on 2/23/2007 11:21:26 AM , Rating: 2
...Is that based on "listening tests" and void of any objective measurements?

RE: Lame.
By TomZ on 2/24/2007 9:18:05 PM , Rating: 1
and yet in most of my readsing I find that wma at the same bitrate is better then mp3.

That's what I've read also. The real problem some people have with WMA is that it is a Microsoft format, and some people have a prejudice against anything Microsoft. The more rational among us will weigh the pros and cons and pick which we like best and avoid forming a bias.

That said, I prefer MP3 to WMA since it is more universally available in player devices.

RE: Lame.
By TomZ on 2/23/2007 8:52:22 AM , Rating: 2
I use all formats. All my CD's are ripped to WAV files. Then I have a batch process that automatically processes all the WAV files and converts them to the format du jour. I'm using MP3 today, but I could easily switch to any other format that has a command-line encoder. This way I'm not stuck with some format that might go the way of the dinosaur.

And don't even get me started on DRM...

RE: Lame.
By miekedmr on 2/23/2007 11:12:08 AM , Rating: 2
WAV is kind of pointless with available lossless compression... Why not store in FLAC and do the same batch conversions as needed?
I use Easy CD-DA Extractor for this, works great..

RE: Lame.
By TomZ on 2/23/2007 11:29:02 AM , Rating: 2
I considered FLAC, but I decided to store WAV instead, since HDD space is so cheap. In addition, then a typical conversion requires two steps, e.g., FLAC -> WAV and WAV -> MP3. I also figure that WAV, being so simple, will always be available as an input format to an encoder.

RE: Lame.
By frobizzle on 2/24/2007 9:55:23 AM , Rating: 2
I considered FLAC, but I decided to store WAV instead, since HDD space is so cheap. In addition, then a typical conversion requires two steps, e.g., FLAC -> WAV and WAV -> MP3. I also figure that WAV, being so simple, will always be available as an input format to an encoder.

Uh, no actually. One-click converter will do the conversion from FLAC -> MP3 in one step.

RE: Lame.
By TomZ on 2/24/2007 9:19:06 PM , Rating: 2
I use the LAME encoder because it used to be one of the best. Anyone know if this is still the case?

RE: Lame.
By leidegre on 2/23/2007 6:22:47 AM , Rating: 2
You can do lossless WMA if you really want to...

By TheOneYouKNow on 2/22/2007 10:36:59 PM , Rating: 4
More Europeans trying to rob micosoft. Imagine that.

I think MS should just stop selling software in Europe and let them fend for themselves.

RE: Yep..
By alifbaa on 2/22/2007 10:43:25 PM , Rating: 3
It would be fun to watch, wouldn't it?

RE: Yep..
By Mazzer on 2/22/2007 10:48:06 PM , Rating: 4
Problem is someone somewhere would find a way to sue them for taken it away.

RE: Yep..
By sicofante on 2/22/2007 10:56:53 PM , Rating: 5
Please, please, please, please do whatever is in your hands to stop Microsoft from selling in Europe. Then all of our companies and public institutions would have to switch to Linux. Ahh, I can dream, can't I?

RE: Yep..
By SiN on 2/23/2007 5:24:30 AM , Rating: 1
In the IT world these patent infringements are inevitable (with the ridicules structure they have, surely there's a better way), there is nothing wrong with what the EU is doing. Maybe they're overstretching it a little in the payment department, and i can't deny that they also slow things down with their regulations. But at least it allows a competitive market and prevents furthering a monopoly. I do not agree with the so called "free market" that its member countries are supposed to enjoy, especially here in Ireland. Along with China and India the EU is a growing market, with plenty potential. It would be foolish to suggest blocking/ignoring any market without any merit.

RE: Yep..
By psychobriggsy on 2/23/2007 8:52:56 AM , Rating: 4
Yup, it would be interesting to see how things would be affected if a market of over 450 million people stopped using Microsoft products.

Within a few years most businesses around the world, in order to interoperate reliably with Europe, would have starting using alternative Office applications. And hey, it's not worth using two applications, so Office would be effectively dead. Windows would die out shortly afterwards except as a gaming OS. Microsoft would lose massively.

So yeah, it would be amusing to see what would happen if Microsoft stopped operating in Europe... but I don't think the outcome you were thinking of would happen. And that's why Microsoft will never stop selling in Europe, and they'll suck up this *US court* fine (the amount is ridiculous, and how the hell did they ignore that Fraunhofer were valid licencers?) if it doesn't get overturned or reduced.

RE: Yep..
By Griswold on 2/23/2007 4:35:00 AM , Rating: 2
Right on, make their day and watch MS all of a sudden shrink to a more manageable size thanks to that.

I know you're just trollbait, but did you read the article? It was an american court that ruled against MS, after all - I'm willing to bet that such ruling would never have went through in a european court, because they wouldnt ignore the fact that alcatel-lucent cant be the sole owner of patent rights to a codec that was developed together with the (german) Fraunhofer Institute.

RE: Yep..
By MrTeal on 2/23/2007 8:59:25 AM , Rating: 2
Microsoft must pay $1.52 billion for infringing on two Alcatel-Lucent patents involving MP3, a San Diego federal jury ruled today.

Is San Diego somewhere between Dresden and Berlin?

RE: Yep..
By TomZ on 2/23/2007 9:04:44 AM , Rating: 2
Did you make it through the second sentence?
This is the first of six patent lawsuits brought by Paris-based telecom equipment maker Alcatel-Lucent.

RE: Yep..
By uallas5 on 2/23/2007 11:51:14 AM , Rating: 2
Did you read the part that says Lucent ?

RE: Yep..
By Hoser McMoose on 2/23/2007 4:14:42 PM , Rating: 1
Lucent is no more. They were bought out/merged with Alcatel to form Alcatel-Lucent. This new company is very much a multinational corporation, but their headquarters is in good ol' gay-Paris.

RE: Yep..
By junkdubious on 2/24/2007 8:22:24 PM , Rating: 4

Is San Diego somewhere between Dresden and Berlin?

Yes. Discovered by Germans, they called it Saahn Deeago. Which, of course, means a whales vagina. You stay classy DailyTech.

Just Pay it!
By cheetah2k on 2/22/07, Rating: 0
RE: Just Pay it!
By neothe0ne on 2/22/2007 8:58:57 PM , Rating: 2
The issue isn't the relative worth of the money to Microsoft, but the fact that the amount isn't nearly justified regardless of the outcome of the case. And besides, the Xbox has burned holes in Microsoft's pockets.

RE: Just Pay it!
By Hyperlite on 2/22/2007 9:04:13 PM , Rating: 2
hell, and what did alcatel-lucent gross last year? even if it is M$, that is a hefty amount. And completely absurd for the suit.

RE: Just Pay it!
By stromgald on 2/23/2007 4:07:12 PM , Rating: 4
According to the CNN article on this, its equivalent to six weeks of cash flow for MS. That's pretty substantial but not all that much.

Nevertheless, that's not the point. MS had a license from a legit licencer of the mp3 format. It's just as MS says, if they go down for this, alot of other companies will also have problems and Fraunhofer's going to lose alot of money. Then again, since the other licencers don't have MS's deep pockets, Alcatel-Lucent probably won't even bother suing them.

RE: Just Pay it!
By TomZ on 2/23/2007 8:14:44 PM , Rating: 2
Are you joking? Six-weeks' cash flow no big deal? $1.52B is a big chunk of change, even for Microsoft.

RE: Just Pay it!
By cheetah2k on 2/26/2007 2:04:21 AM , Rating: 2
Ah, ok, i deserved to be down-rated for that comment.. hehehe..

But more to the point.. I don't know about you guys, but i'm getting a little sick and tired of seeing and hearing about all these cross patient, he said, she said, lets sue em all articles regarding the licencing of tech.... I mean, what ever happened to the days when one would check (as best they can) the existing patents in play before going to FCC with a new product?????

It seems the industry is going down the lines of "suck and see" with patents, with many companies thinking they can just get a way with not having to contribute royalties..

In away, i feel the $1.52Bn is a bit much for infringed patents, however, M$ and others need to be taught a lesson, and this lesson should be to invest $100k/year in someone (or a good patent firm) who can check the damn patents and licencing requried before going to press.

It's all pretty poor (lazy) form if you ask me...

RE: Just Pay it!
By MADAOO7 on 2/22/2007 11:49:13 PM , Rating: 2
Thank god for burnt pocket holes - I love the

patents suck
By Gooberslot on 2/22/2007 11:19:08 PM , Rating: 5
Just another example why software patents suck for everyone, big and small.

RE: patents suck
By just4U on 2/23/2007 2:02:12 AM , Rating: 2
I don't understand. If they licensed it from the industry people who held the patent why are they being sued?

RE: patents suck
By emboss on 2/23/2007 5:18:56 PM , Rating: 2
Because the USPTO doesn't do its job properly?

The official response
By crystal clear on 2/23/2007 5:55:26 AM , Rating: 2
"We think this verdict is completely unsupported by the law or the facts,”

Here the full response-

RE: The official response
By TomZ on 2/23/2007 8:54:10 AM , Rating: 1
$1.5B can pay a lot of lawyers for a long, long time. I'm sure this will be appealed up to the Supreme Court before Microsoft pays an amount like that.

RE: The official response
By NoSoftwarePatents on 2/23/2007 12:12:02 PM , Rating: 2
Fact-Microsoft management LIKES software patents to weld against their corporate enemies, even though they didn't build the company up in the pro-software patent environment the USA is currently doing, since this crap was legalized in 1998.

At the same time, they get burned all the time by software patents, like the Eolas case, that Microsoft did get to pay...

Hopefully, the supreme court will at some point rule on the actual validity of whether software can be patented or not.

RE: The official response
By crystal clear on 2/24/2007 4:12:20 AM , Rating: 2
I recently made a comment on judges & patent laws.

Their opinions/judgement cost(comapnies/indivsuals) loss of income or pay damages,as the case maybe.

But are these JUDGES capable/qualified technically to decide on such case????.Read this-

House: Judges patently in need of patent education

The House of Representatives unanimously passed a bill yesterday that will establish a program for educating judges on patent laws and allow judges to defer patent cases to more well-versed colleagues. The official title of the bill is "to establish a pilot program in certain United States district courts to encourage enhancement of expertise in patent cases among district judges," and it was introduced last spring by representatives Darrell Issa (R-CA) and Adam Schiff (D-CA). The bill was approved by voice vote in September, and after yesterday's motion to suspend the rules and pass the bill based on voice vote, it now awaits Senate approval.

Under the proposed pilot program, certain US district court judges will be able to request being assigned patent or plant variety protection issues. Patent cases will still be randomly assigned to district court judges regardless of whether or not they opt in. However, in districts that are participating in the pilot, judges can then choose to defer the case to another judge who has opted in on patent cases. When a case is deferred, it will be randomly reassigned to one of the judges who opted-in, says the bill's text. The purpose of the random assigning and reassigning process is to cut down on "forum shopping," according to Schiff.

The desired outcome of such a policy is for patent cases to be heard more quickly and by more experienced judges than they have been in the past. "This legislation will raise the level of expertise in patent litigation, improve the reliability of patents and allow businesses to spend more time inventing and less time litigating," Representative Schiff said in September, adding that he hoped the bill would ultimately reduce costs to consumer.............

The legal system has to change/adapt to situations of today,
just as laws have to change/adapt to situations of today & tommorow.

RE: The official response
By crystal clear on 2/24/2007 4:24:58 AM , Rating: 2
By the way NEXT in line for such a case for damages will be APPLE.

The precedent has been set to file another case against APPLE for similar charges.

Read this-

Will this seemingly endless patent catfight have any ramifications outside of Alcatel-Lucent and Microsoft? Other operating system providers, such as Apple and Linux distributor Linspire, also have license agreements with Fraunhofer over the use of MP3 technology. Theoretically, they could also find themselves the target of an Alcatel-Lucent lawsuit. While most Linux distributions put the matter into the users' hands by not distributing MP3 technology with the core OS, the personal use clause that allows this is based on the Fraunhofer license. Makers of portable MP3 players could find themselves at risk as well

Totally absurd
By obeseotron on 2/22/2007 8:33:11 PM , Rating: 4
News to me that someone other than Fraunhoffer has the rights to MP3, and regardless of that, $1.52 billion? I know it's Microsoft, and even a sum that large isn't exactly going to push them into the red, but that doesn't make it any less absurd. Exactly what revenues has MS deprived Lucent of? Why go after them and not the million other MP3 related products that surely don't pay them?

RE: Totally absurd
By crimson117 on 2/22/2007 8:52:38 PM , Rating: 2
True that... it's nearly 100 times the licensing fee that MS paid originally.

another problem
By sprockkets on 2/22/2007 11:08:32 PM , Rating: 2
That is the issue with mp3. Every BS company thinks it owns the format. What the hell, Alcatel, a phone company? Go F yourself.

aac is actually free in licensing except for encoders and decoders, but sucks without other people enhancing it, and aacplus v1 and v2 are heavily patented and require licensing. It is the only format I have tested that comes close to ogg/vorbis quality (aoTuV that is :)

I wonder why people like SuSE do not want to bundle mp3 support...

RE: another problem
By raven3x7 on 2/23/2007 12:51:56 AM , Rating: 2
why suse doesnt ship with mp3 support? maybe you should take another peek at the article...

RE: another problem
By raven3x7 on 2/23/2007 7:33:33 AM , Rating: 2
i guess i should pay more attention to what i read...

Hey they (MS) buy you cheap.....(only $ 45)
By crystal clear on 2/23/2007 5:13:10 AM , Rating: 2
This comment-says it all.

"I was more shocked to find out that one of my photographs is available to hundreds of millions of people,"


"One of the default images that appear as display “wallpaper” in the Windows XP operating system was taken in Burlington."

Computer scene inspires a year-long quest to find the leafy lane

Fortunately, and probably by "magic," a Vanity Fair researcher was able to track down the name of Autumn's photographer. Peter Burian shot the picture along with hundreds of frames in October 1999 while he was testing lenses for a photography trade magazine. He sent it to Corbis, where Microsoft probably purchased it for $300. Burian's cut was $45.

The Milton man says it was a treat to get Tosches's call.

"I was more shocked to find out that one of my photographs is available to hundreds of millions of people," he says. "I didn't think anything of it when I took it."

The lane in the picture leads to an unspectacular farmhouse once owned by the Harris family, one of the first settlers in the area, Burian says.

RE: Hey they (MS) buy you cheap.....(only $ 45)
By TomZ on 2/23/2007 8:49:18 AM , Rating: 1
You might be interested to know where Microsoft got its wallpaper images for Vista:

I, for one, would be honored to have one of my photographs be used in the OS. A token payment would be fine with me, and I am sure there are lots of other amateur photographers who feel the same way, which is why Microsoft doesn't have to pay much for these photos.

If Microsoft wanted to pay a high royalty rate for photographs, they would just license them from someone like Getty Images, rather than going through all the work they did in Vista. Getty has plenty of images ready-to-go that could be used immediately.

By crystal clear on 2/24/2007 3:59:04 AM , Rating: 2
"I, for one, would be honored to have one of my photographs be used in the OS. A token payment would be fine with me, and I am sure there are lots of other amateur photographers who feel the same way,"

YES indeed agree with you,
but atleast GIVE the guy THE CREDIT for having selected his photos .

Atleast this acknowledgement will get him some more assignments & income from other companies.

Inshort you help him out to earn more from other soucres.

Whats a letter of acknowledgement/recommendation for MS-nothing,(it does not cost them a cent),
but that LETTER enables him get MORE WORK/INCOME.

Photograpy is his living/livelyhood.


Judgement is fair
By rocketcuse on 2/23/2007 10:51:35 AM , Rating: 1
Though I am surprised that MS lost this case with a valid licensing agreements from Fraunhofer-Gesellschaft.

But, the judgement itself is fair. From Yahoo's release.."damages were calculated by multiplying Windows sales volumes and PC sales prices worldwide since May 2003." ( )

I am not saying I agree with the judgement or the judgement payout. But, Media Player with the in question MP3 license ships with every copy of windows. Therefore each copy of Windows OS sold is a infrigment. That's what MS gets for bundling their OS's!

RE: Judgement is fair
By michal1980 on 2/23/07, Rating: 0
RE: Judgement is fair
By TomZ on 2/23/2007 5:18:39 PM , Rating: 2
Fair my ass. The question is, if you assume the patents are legal and binding, then how much would Microsoft have needed to pay in licensing fees in order to use the technology. Does anyone in their right mind expect that Lucent would have proposed a licensing fee of $1.5B, or that the technology would have been worth anything near that much to Microsoft (or anyone!)?

And, I also like that WMP is bundled with Windows. It saves me from having to download and install annoying little adware apps like AOL's WinAmp.

RE: Judgement is fair
By JB1592 on 2/24/2007 2:31:35 PM , Rating: 2
And, I also like that WMP is bundled with Windows. It saves me from having to download and install annoying little adware apps like AOL's WinAmp.

They don't need to bundle their app as part of the O/S for you to not have to use WinAmp. They could just as easily make it:

a) An OPTIONAL component
b) A free download on its own

Same goes for Movie Maker and Windows Messenger and all the other crap that is far from a necessary O/S component.

Aside from that, WinAmp is far from the only alternative media app, nor is it the best, imo.

By TheDoc9 on 2/23/2007 10:28:30 AM , Rating: 2
Who is this company? Tell you what, If liscensing doesn't even protect you from a lawsuit anymore then what does.

RE: alcatel-lucent
By mino on 2/25/2007 5:47:30 PM , Rating: 2
That is the point of it.

By jay401 on 2/24/2007 12:30:46 PM , Rating: 2
That's a hefty fine even for a big corp like Microsoft.

"Well, there may be a reason why they call them 'Mac' trucks! Windows machines will not be trucks." -- Microsoft CEO Steve Ballmer
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