RSSJudge Upholds $1.53 Billion Patent Verdict Against Microsoft
By Scott M. Fulton, III | Published May 3, 2007, 12:29 PM
Microsoft's hopes that Monday's historic pair of US Supreme Court rulings - including a Microsoft victory over AT&T - would lead to a revisiting of a $1.53 billion ruling against it in favor of Alcatel-Lucent, were dashed yesterday afternoon. US District Court Judge Rudi Brewster upheld the jury verdict from last February, as a penalty to Microsoft for having acquired its license to use MP3 technology in its Windows Media Player from the wrong supplier.
Microsoft was one of multiple companies, including Apple, that were sued by Alcatel (Alcatel-Lucent's predecessor) for using what it claims to be its technology without a license. Lucent's own predecessor, AT&T Bell Laboratories, was the co-creator of MP3 along with Fraunhofer Labs, which may have contributed technologies to the 1992 collaboration that dated back to 1987.
While other countries recognize Fraunhofer as the originator of these technologies, Bell Labs filed certain patents in the US for their collaborative work first.
Although AT&T apparently didn't have designs to capitalize on those patents, enabling Fraunhofer and Thomson to operate a joint licensing facility, Lucent started having other ideas in 2003, during an extended period of waning revenues. It filed suit against Gateway and Dell for using Windows Media Player in their computers, claiming its MP3 support had not been licensed by the proper party. Microsoft gallantly stepped in, legally assuming the role of defendant on behalf of two of its biggest Windows customers.
At the outset, Lucent sought "willful infringement" damages, claiming the licensees exploited MP3 technology to spite Bell Labs. Had Judge Brewster agreed with that claim, Microsoft might have owed $4.6 billion.
Monday's Supreme Court rulings might have given Microsoft some ammunition with which to fight the damages, though their connections may have been a little slippery. The AT&T v. Microsoft ruling ostensibly decreed that the exporting of software can only be considered infringing on patent rights if the thing that was exported matched the description of the thing that was patented. In this case, Microsoft only shipped installation tools for foreign manufacturers to install Windows software that uses drivers that happen to fall under AT&T's patent rights. Microsoft was therefore found to be not liable under US patent law, overturning a lower court ruling.
In that ruling, however, the Court upheld Microsoft's argument that source code was an abstract concept, more an expression of speech rather than a working mechanism. A future Microsoft appeal of the Alcatel-Lucent award might touch on what it was that Bell Labs and Fraunhofer contributed to MP3's creation, arguing that the latter party supplied the basis of the technology while Bell supplied abstract concepts. Evidence would have to be provided to support this argument, of course.
The other Supreme Court ruling -- of equal significance, although on the surface it dealt with automotive gas pedals -- came in KSR v. Teleflex. That ruling stated that an improvement to a patented design, if it could be made by an individual of ordinary (non-specialized) talent, cannot be considered an infringement upon the original design's patent. Therefore if somebody improves a gas pedal, and that improvement seems an obvious enough way to do so, somebody with a patent on gas pedals can't cry foul.
That argument could possibly be exploited in a Microsoft appeal as well: During the MP3 collaboration, just who had the original idea, and who supplied the improvement? And was that improvement obvious? If you ask European courts, they would uphold Fraunhofer's claims.
But that argument could backfire. European patent courts also recognize the first-to-file as the official inventor of a design, even when documents turn up to show someone else may have come up with the design first.
The US is one of a few countries to recognize a different system, enabling individuals with earlier designs to file complaints. But patent reform law currently before Congress could change that, moving the country to a first-to-file system to become more compatible with international patent and copyright protection.
If that happens, Bell Labs could be upheld as having been "first-to-file" in the US, even though Fraunhofer's claims are verified elsewhere. Microsoft's argument that Bell Labs' successors may have even gone so far as to change the dates on legal documents to make it appear they filed earlier then they did, might no longer be useful. In that case, the Alcatel-Lucent award could conceivably be upheld.
The MP3 patents were just one of three groups under contention between Alcatel-Lucent and Microsoft. A separate suit on the first group involving text-to-speech conversion technologies, was thrown out by Judge Brewster last March. A trial on the third group, which is said to involve user interface technologies, is slated to begin May 21.
Maybe I'm too stupid to understand this, so perhaps someone could explain it to me. As I understand it, Microsoft wasn't "stealing" anything, in fact they licensed the MP3 technology from the co-creators, who at the time, chose to capitalize on their patent. Then many years later the other co-creators step forward crying foul, "Hey wait a minute, we decided we want money too, since our business is going down the toilet. Microsoft has deep pockets, let's reach into them!" What I don't get is how Microsoft is liable for Alcatel's stupidity. They licensed the technology from the party who co-created it, it's not their fault Alcatel chose not to speak up at that time. You cannot tell me Alcatel was unaware of Microsoft licensing the technology from Fraunhofer, and it took them several years to figure it out. The whole idea is outright ludicrous to me. Like I said, maybe I'm just too stupid to comprehend the whole situation. We have a company (Microsoft) who pays for a technology (rather well I would guess) and then later is found liable because they licensed the technology from the wrong party. Shouldn't it be Fraunhofer who is responsible? Since they're the ones who took Microsoft's money. Oh wait, that company is outside of US jurisdiction and Alcatel would never see a red cent from them I bet. Better to reach into everyone's favorite piggy bank: Microsoft.
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|I agree with the person who said our legal system is in shambles. The problem is not restricted to corporations.
I had a friend in Phoenix who was constantly in court. He actually made his living by finding either people or corporations that he could sue. Apparently he won often enough to make a pretty good living at it. It has been noted that the people who hate lawyers the most are those who have the most contact with them.
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|As others have posted, the judge should have thrown Alcatel-Lucent out of court simply on the fact that AT&T did not enforce it, and (I could be wrong) but I believe if you have not enforced it for 5 years, you loose the right to do so with patents; a time period that seems to have gone past with AT&T alone (~1992, ~2003).
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|Pathetic, OGG format if free, in addition, it has better quality for the same file size. Instead, they preferred to go with MP3 and now got stuck with a BILLION+ law suite.
The executives at Microsoft will learn their lesson though. After losing this one, for the next codec, they will infringe the IP of another codec that they will negotiate a lower legal expense. Until the day they finally understand what a free codec is, they will no longer be executives.
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|MS's only mistake was purchasing the license from a source that MIGHT not be the right one. Nothing more.
If you were old enough to have seen those audio formats emerge you would more logically know what is what. There were many formats that were better than mp3...but they were only developed or matured a little too late for business decisions.
Just like vqf...what is it? Does it matter? lol...dang I got some files in that format.
Hey, if YOU engineer a codec and MS wants to license from you...that's a bad thing I guess right? Funny world.
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|Pathetic, OGG format if free, in addition, it has better quality for the same file size. Instead, they preferred to go with MP3 and now got stuck with a BILLION+ law suite.
Considering the defacto standard is still MP3 (torrents, usenet, p2p) skipping support for it would have been a horrifyingly bad business move.
Of course, based on your apparent anti-MS bias, I wouldn't expect you to take that into account. Ignoring such things makes it *so* much easier to troll.
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|Sounds like it's time to use a different codec for music like AAC so companies don't have to get a license for MP3 from two companies. Plus who wants to use early 90's compression anyways.
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|Me.
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|I could have sworn Fraunhofer was the licensee of MP3 as well. Having used their encoder in the very early days and such.
What was never and should never have been an issue was made such for one reason only:
Although AT&T apparently didn't have designs to capitalize on those patents, enabling Fraunhofer and Thomson to operate a joint licensing facility, Lucent started having other ideas in 2003, during an extended period of waning revenues.
I can't believe the judge ignored that part. AT&T *allowed* this...until they took a hit in the bottom line.
But hey, when profit goes in the toilet, sue! The US legal system is completely f*cked.
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|A guy walks into a bar looking obviously very upset and annoyed.
He walks up to the bar and snarls at the bartender, "Gimmie a drink!"
The bartender complies. The fellow belts down his shot and growls, "Gimmie another!"
This time the bartender is a bit concerned, so as he pours the second drink he asks the guy, "Hey buddy, are you OK ? What's bugging you ?"
The angry man yells back at the bartender, AGH! All lawyers are a$$holes !!"
Meanwhile, at a nearby table, another man hears this and says to the angry guy, "Hey fella...I *really* resent that remark."
The angry guy asks him, "Why. Are YOU a lawyer?"
To which the other man replies, "No. I'm an an a$$hole."
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|RIS?
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|lmao..
Excellent.
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|Even better !
Have you seen this ??
http://www.msnbc.msn.com/id/18471265/GT1/9951/
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|...and reconsider they should. Though having an idiot or two out there pointing out the absurdity of some of our statutes (the one that allows him to call for $65 million being a big one) isn't all bad.
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|Legally, one can bring suit for just about anything.
I could sue you for "traumatizing me" with some of your barbs on those occasions when we bang heads; and I could sue Betanews for not monitoring the site and being complicit in my trauma...blah, blah, blah.
We read about these patent suits here every day and it's starting to become similar to the old adage about ice hockey: "I went to a fight last night and a hockey game broke out", only in this case it will be something like, "I got involved in a $1 Billion lawsuit and ended up with some new software."
It's too bad really, because civil courts do have an important place in our society. I hope that judge is removed from the bench.
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|The problem is that there are, effectively, little repercussions for bringing on frivolous lawsuits. That needs to be fixed, big time.
Suing me for calling you a doorknob on a site should result in your paying my legal fees as well as the cost to the state. That would do *much* to force folks (and they're lawyers) into looking very closely at the validity of such lawsuits.
...doorknob. :p
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|Sorry for the delay in replying; I was waiting to hear from my lawyer concerning that "doorknob" comment.
You'll be hearing from him shortly.
Actually, certain states do allow litigants to counter sue on the grounds of "Frivolous Litigation" with treble damages being the result. I recall a case back in the early days of Court TV where this man sued a school district because his son was not inducted into the school's "Honor Society" and the father contended that this omission would hurt his son's chances when applying to colleges.
If I recall, not only did the man lose his suit, but he was sued by the school for Frivolous Litigation and had to repay, as you suggested, all court costs & legal fees, as well as damages.
There may be something like that in your state, as I believe there is here in New York.
Always a pleasure...banana head. ;>
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|certain states
There lies the problem.
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