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Microsoft Patents Government The Courts News

Microsoft to Pay $1.52 Billion in Patent Suit Damages 170

Posted by CowboyNeal
from the coughing-up-the-dough dept.
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."
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Microsoft to Pay $1.52 Billion in Patent Suit Damages

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  • by gravesb (967413) on Thursday February 22, 2007 @07:57PM (#18116300) Homepage
    Microsoft being penalized or software patents being eliminated? Its like torture! Which way will we go!
    • by cfoushee (803584)
      Definitely the patent being eliminated on this one since MS actually purchased a license for their mp3 encoding.
      • Yeah I know. When I get nailed by Microsoft for using the FAT filesystem under Linux, I'll just tell Ballmer's henchmen "Hey, I bought my license from Bob down the road!"
      • No problem (Score:2, Funny)

        by Anonymous Coward
        If they bought a license, what's the big deal ? All they need to do is recover the relevant emails from their backups.
      • Unfortionatly, the MP3 format is covered under multiple Patents now. In the past, there was only one license being enforced. Lucent has chosen to assert their patent which ALSO covers part of it.

        Don't get me wrong, I think it's a load of dung, but that's why it's valid that they paid for one, and got nailed by another.
    • Black Books (Score:3, Funny)

      by Stevecrox (962208)
      I dunno I just have to hope when I flip the coin it explodes and kills me
    • by Chris Burke (6130) on Thursday February 22, 2007 @08:10PM (#18116430) Homepage
      Oh, that's easy! Ideally Microsoft pays the fine first, once again getting bit in the ass by software patents, and thus becomes an even greater force against software patents. Software patents are eliminated, and both MS and Free Software folks have a big party together with beer kegs and streamers and drunken install CD swapping.

      Then Microsoft gets fined another $1.5 billion, for being jerks. Then another billion for being assholes. Then another billion for each chair Ballmer has thrown.

      But seriously, I think them being penalized goes great with getting rid of patents. The more evidence that software patents are a hindrance to the software industry the better.
      • by jkrise (535370) on Thursday February 22, 2007 @11:59PM (#18118342) Journal
        both MS and Free Software folks have a big party together with beer kegs and streamers and drunken install CD swapping

        I can picture the scene...
        MS: Have some more beer... no more patents to file... all our IP goes down the drain.
        Hippie 1: I don't drink branded beer.. only Open Source beer.
        Bruce: I told you so... patents are like spitting in the wind. I've brought my own beer along, rejoice!
        RMS : I only touch Free Beer. Make it GNU Free Beer and I'll drop plans for GPL3.
        MS: No need to pay lawyers anymore... billions saved every year... some more beer, anyone?
        Linus: I take back whatever nonsense I spoke about Patent Pools. Maybe RMS is right after all?
        ESR: I think I'll start writing FetchBeer now...
        Moglen: Patents may be gone, but copyright still remains.. and DRM, DMCA as well. Can I have some free beer?
        Ballmer: I've brought a chair for all of you!

        • Re: (Score:3, Funny)

          by mgiuca (1040724)
          Wait wait, is this beer free as in beer? I think RMS goes for the other kind...
      • by StressGuy (472374)
        Oh, that's easy! Ideally Microsoft pays the fine first, once again getting bit in the ass by software patents, and thus becomes an even greater force against software patents. Software patents are eliminated, and both MS and Free Software folks have a big party together with beer kegs and streamers and drunken install CD swapping.

        Until....PC has a little too much "beer-fueled revelry" and gets videoed by the free software folks playing "boot camp" with Mac. The whole things gets posted on YouTube and only
    • Re: (Score:3, Informative)

      by TheRaven64 (641858)
      In the other software patents article, I pointed out that MS had lost around a billion dollars to software patents last year. Looks like they're well ahead of that this year already.

      Anyone still want to claim that it makes sense for MS to be in favour of software patents?

      • Re: (Score:1, Interesting)

        by Anonymous Coward
        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.
        • by Paradise Pete (33184) on Thursday February 22, 2007 @09:43PM (#18117328) Journal
          $1.5 billion is a lot of money, even for Microsoft

          Yup. Based on last year's gross profit they're going to have to save up for almost 15 days to pay that off. That's gotta hurt. That's like a whole paycheck right down the drain.

    • by dbIII (701233)
      with the enormous waste of resources here due to a Micky Mouse IP system it really doesn't matter who it happens to - all the people involved would have been far better off doing just about anything other than playing games with a silly patent system. Time for the tinfoil hat people to say it's an effort to cripple the USA and make it economicly irrelevent - without manufacturing and innovation what do you have left?
      • Re: (Score:2, Funny)

        by maxume (22995)
        Services, all the way down.
      • by arivanov (12034)

        This case has nothing to do with Mickey Mouse.

        It has to do with USA claiming that their laws are universal, apply to anyone and everyone around the world and there is no other law, but USA law. And as usually the side presenting this view won in a USA court.

        In fact I doubt that the supremes will do anything about it as doing anything about it will undermine one of the fundamental ideas behind the USA judicial system and foreign policy.

        It is in fact an idea which is beaten into USA kids from age 3 and

        • by dbIII (701233)

          This case has nothing to do with Mickey Mouse.

          In the slang of some english speaking countries a Mickey Mouse appreach to a problem is a very stupid and useless one. Software patents are a mickey mouse approach to a copyright problem.

    • Easy...

      One is short term, the other long term.

      MS will collapse on their own, eventually anyways -- I'd rather have better solution for the long term.
    • No more Mp3 (Score:4, Interesting)

      by goombah99 (560566) on Thursday February 22, 2007 @10:00PM (#18117464)
      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?
  • Hmmm... (Score:3, Insightful)

    by Frosty Piss (770223) on Thursday February 22, 2007 @07:59PM (#18116318)
    Well, you know, patents are bad. So even though MS is "evil", supporting this ruling is the wrong way to go... Right?
  • by gasmonso (929871) on Thursday February 22, 2007 @08:01PM (#18116348) Homepage

    Lately it seems that Microsoft has been spiraling downward at a good pace. From the uneventful launch of Vista to lawsuits like this, I think MS is spending more time on litigation and PR than developing good products.

    gasmonso http://religiousfreaks.com/ [religiousfreaks.com]
  • by andy314159pi (787550) on Thursday February 22, 2007 @08:07PM (#18116388) Journal
    Yeah I offered them an Alcatel-Lucent MP3 patent Indemnification plan but they said I was just trying to shake them down.
  • ogg (Score:5, Insightful)

    by Anonymous Coward on Thursday February 22, 2007 @08:11PM (#18116434)
    even big companies can benefit for adopting royalty-free open standards.
    • See MS paid all the royalties on MP3. MP3 is owned and licensed by Thompson Multimedia. They've got a page set up for it (mp3licensing.com) well established rates, and so on. The problem is that Lucent apparently feels that they have a patent that covers it as well and is doing what many businesses do when their own products start sucking: Trying to get money from the big boys.

      Well the same shit could happen to OGG. The developers give it out for free and claim no patents over it. Nobody is real likely to s
  • by Yeechang Lee (3429) <ylee@pobox.com> on Thursday February 22, 2007 @08:13PM (#18116456) Homepage
    Bill Gates gets a call while he and his wife are having dinner out. Gates' response after hanging up:

    "Honey? I'll be right back. Steve needs $1.5B so I'm going to go to the ATM across the street. He's waiting outs--I think that's him honking. Can you order the chocolate cake for me for dessert?"
    • by Glacial Wanderer (962045) on Thursday February 22, 2007 @08:42PM (#18116718) Homepage
      "Honey? I'll be right back. Steve needs $1.5B so I'm going to go to the ATM across the street. He's waiting outs--I think that's him honking. Can you order the chocolate cake for me for dessert?"

      Assuming that ATM distributed $20 bills Bill just carried 82 tons of cash from the ATM to Steve's car. I guess he's spent some his of change under his sofa on cybernetic enhancements.
      • by mgiuca (1040724)
        You know I think Microsoft should pay them in $20 bills. I mean..... we all know what 80 tonnes of coins would be like... just for once I want to see 80 tonnes of bills.... please?

        (Plus, it'd be nice to see forklift operators making big money off these court disputes instead of lawyers all the time).
  • by lelitsch (31136) on Thursday February 22, 2007 @08:14PM (#18116468)
    The actual case is actually not half as interesting as Microsoft's and the Justice Department's arguments that source code isn't patentable [betanews.com]. "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."
  • by Macka (9388) on Thursday February 22, 2007 @08:15PM (#18116474)

    What we have learned to date is that Microsoft will never have to pay anything like this kind of penalty. Even if they are guilty, they have already demonstrated their ability to heap appeal on top of appeal until many years from now, technology advancements will have moved the goal posts, effectively rendering the original claim irrelevant.

    Their mastery of the legal system is so complete that were Eliot Ness alive today, Microsoft would be the principal nemesis in The Untouchables 2.

    • We also have learned that Microsoft may even be above the law [technologyevangelist.com] in some respects [technologyevangelist.com].
    • What we have learned to date is that Microsoft will never have to pay anything like this kind of penalty. Even if they are guilty, they have already demonstrated their ability to heap appeal on top of appeal until many years from now, technology advancements will have moved the goal posts, effectively rendering the original claim irrelevant.

      • They have payed fines in the past.
      • Even if they do manage to avoid paying a particular fine by years of lawyering, that costs a lot of money as well, so this only miti
  • 1.52 Billion????? (Score:2, Insightful)

    by scoot80 (1017822)
    Shit, I don't care how rich Microsoft is.. 1.52 billion? Thats gotta hurt!
  • I'm scared (Score:5, Funny)

    by Neon Aardvark (967388) on Thursday February 22, 2007 @08:27PM (#18116588) Homepage

    Patents are evil. Microsoft is evil.

    Therefore, Microsoft being slightly hurt because of a patent infrigement ruling == neutral and we can all go home and have a nice cup of tea.

    PS I'm scared because my last post was modded "flamebait", possibly because I accidentally called Canada the "People's Republic of Canuckistan". That hurt.

    • Learning it the hard way. Microsoft funds pro-software lobbying, in fact it is the major donor of pro-software patent lobbying. A software company invests into the business model of patent agents. A economically useless patent system. Shouldn't they better invest in sound patent reform?
  • Oooooooooh, that's gotta hurt!

    http://www.imdb.com/title/tt0228246/quotes [imdb.com]

    Enjoy,
  • Does anyone know the details of this? I mean I always thought Fraunhofer would hold the mp3 patents, and it seems that MS had licensed them, as I guess many others. Does Lucent/AT&T really own mp3 and can go after everybody?
    • by mochan_s (536939) on Thursday February 22, 2007 @08:50PM (#18116796)
      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.
    • by mochan_s (536939)
      Network equipment maker Alcatel filed two lawsuits on Friday alleging infringement of seven of its patents. The patents cover a range of techniques aiding user authentication, network address translation, setting up data communications and transporting video.

      Alcatel refused to say how Microsoft had infringed its patents, and wouldn't say which products caused the infringement. Lucent, which is due to merge with Alcatel by November 30, was already involved in a patent dispute with Microsoft over video-decodi
  • It's not over yet (Score:3, Informative)

    by Anonymous Coward on Thursday February 22, 2007 @08:32PM (#18116628)
    MS still has a number of appeals. Most importantly, the Federal Circuit has a 30-40% reversal rate in patent claim construction cases. It's too early to say that MS will pay.

    • by ms1234 (211056)
      And if they have to pay they'll just give out vouchers to Alcatel-Lucent for Vista licenses :)
  • Doesn't just about every piece of commercial MP3-related software also have the same deal with Fraunhofer? Does this case expose hundreds of companies to similar legal problems? Does not at all seem like a good thing at first reading.
  • What pisses me off is how they can go around suing everyone for patent stuff when they do it themselves thinking no one will find out.
  • by GlitchyBits (1066840) on Thursday February 22, 2007 @08:46PM (#18116756)
    Tough days for chairs ...
  • It ain't good (Score:5, Insightful)

    by kocsonya (141716) on Thursday February 22, 2007 @08:53PM (#18116840)
    Chances are, M$, instead of seeing the light and lobby against the patentability of algorithms/math/shapes of clouds/ways of combing hair/etc will just hire more patent lawyers and patent everything remotely connected to computers to build a very thick patent armor and a large caliber cannon too.

    At the end of the day Lucent and Microsoft and all those behemoths will sort it out between themselves and the small players get eliminated.
    The IP lobby gets multiple orgasms, extends patent expiry terms to that of copyright, then extends the copyright to be ahead of patents and generates a new class of IP, the 'unpublished thought'. Since that latter can not be effectively monitored (yet), they introduce a levy (indexed by the education level) to be paid by any cognitive being to the TCAA (Thought Control Association of America); those who can't pay can instead sell themselves to the TCAA, which will export them to Chinese sweatshops as extra cheap slave labour. Persons trying to hide their being educated will be prosecuted as thought terrorist and will be sent to secret CIA torture centres where they will be used for testing new methods of extracting one's innermost thoughts. Skipping school is considered a federal offense and offenders are sent to re-education camps (these can be cheaply leased from Gulag, Inc. a company run by the Russian maffia). People in coma (and thus with no income) but with measurable brain activity will have their organs removed and sold to pay for their thoughts, however, as soon as their EEG goes flat, no more organs can be extracted in lieu of the thought levy. Rather, all remaining organs can be taken by the TCAA as payment of punitive damages for depriving the TCAA of its income by the old trick of being dead.

    Then the ants all go to the Père Lachaise cemetery and spit on La Fontaine's grave.
  • by mochan_s (536939) on Thursday February 22, 2007 @08:56PM (#18116882)
    Has begun, the patent wars.
  • by MaxPower2 (976000) on Thursday February 22, 2007 @09:00PM (#18116930)
    For those of you who are caught up in hating MS, open your eyes and see what this really means. Many other companies licensed the technology from Germany's Fraunhofer. The list includes Apple, Sony, Creative Tech., Napster, and many other companies. This means that if this ruling stands, you will see many other lawsuits in the future related to this technology.
  • Neither story actually tells us anything about the alleged issue. They mention MP3, Fraunhofer, speech conversion, Lucent, but zilch about Microsoft-MP3-Lucent-courtcase. Crap journalism.
  • Morbo wants more patent suits. Make the whole system collapse in on it's stupidity.

    Bonus points since MSFT just threatened to sue Linux users for violating MSFT patents.

    mmm karma.
  • Wall Street laughed at this news when it was released. If the street doesn't believe it, you can bet it's a non-event.

    Even if MSFT does pay, which wouldn't be for quite some time, they have 26 Billion dollars in cash on hand, and revenues of 46 Billion per dollars year.

    In other words this is not the end of MSFT as some alarmists are claiming.
  • Expect lawsuits all over the place. This really is the type of thing that the EFF should get involved in - they went after MS first, but expect Apple and fifteen million other companies to be attacked by this too. They've basically backdated a patent so the current deals don't apply and they can sue practically everybody for silly money - this is really a "BURN ALL MP3S"-type situation.
  • No! Bad Slashdot! (Score:3, Interesting)

    by Quantam (870027) on Thursday February 22, 2007 @10:34PM (#18117768) Homepage
    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.
  • Good (Score:3, Insightful)

    by melted (227442) on Thursday February 22, 2007 @11:21PM (#18118110) Homepage
    A few more of these and software industry will abolish patents on its own volition.
  • snerk (Score:3, Insightful)

    by trudyscousin (258684) on Friday February 23, 2007 @02:17AM (#18119212)
    "We are concerned that this decision opens the door for Alcatel-Lucent to pursue action against hundreds of other companies who purchased the rights to use MP3 technology from Fraunhofer, the industry-recognized rightful licensor," Tom Burt, Microsoft's deputy general counsel, said in a statement.

    Oh! I see! Microsoft is now The Company That Cares!

    Please. Since when has the welfare of another company been of any interest whatsoever to this utterly ruthless behemoth?
  • First people were mad that MS had abandoned 'industry' standards by not shipping an MP3 ripper in WMP in Windows.

    Then when they do put MP3 ripping in, this is what happens?

    Why was MS the only company sued, when there are thousands of companies using MP3 technology, many that didn't even pay for the license like MS did?

    So when people complain about MS not using a 'standard' and instead using their own technology like WMA, maybe they should remember crap like this happens all the time.

    I don't blame them for u
    • by mgiuca (1040724)
      You're not making a distinction here between open formats and proprietary formats. (Where an "open" format is something which I consider to be unpatented, fully-documented, and (as I'll get to), truly portable).

      First people were mad that MS had abandoned 'industry' standards by not shipping an MP3 ripper in WMP in Windows.

      Now the main reason people got mad is because they foresook one patented proprietary format (MP3) for another patented proprietary format (WMA). (Yes WMA is patent-encumbered, look at what

      • I wish I had more time this morning to respond to everything, I might try to follow up if I get more time later. Just a few quick points.

        You're not making a distinction here between open formats and proprietary formats. (Where an "open" format is something which I consider to be unpatented, fully-documented, and (as I'll get to), truly portable).

        Ok, first the sources I cited that created outrage original are NOT OSS. JAVA, PDF, etc...

        OpenXML is the only exception and I should have pointed out the distinctio
        • by mgiuca (1040724)

          I wish I had more time this morning to respond to everything, I might try to follow up if I get more time later. Just a few quick points.

          Lol, you picked a lot ;) Feel free to write more later...

          Ok, first the sources I cited that created outrage original are NOT OSS. JAVA, PDF, etc...

          Hmm, this whole part of your response seems to think I'm advocating Open Source Software. Which I do advocate, but in this particular instance, I was talking about Open Standards. There's a big difference - Ogg is an Open Standa

  • 1.5 billion USD is exactly the size of Fraunhofer's entire annual research budget, according to their site [fraunhofer.de].

    (Assuming 1,2 Mrd euros means 1.2 milliard, or 1.2 billion, and xe.com says that is $1.57 bn)

    Does anyone think someone's lost their sense of scale here? It doesn't answer my initial question though of whether MS could just buy Fraunhofer, with its 12,500 employees.
  • My understanding was that LAME was designed to be "fraunhofer free", and thus usable without licensing. But does that still hold up in view of the Lucent patents?

    If so, then maybe more commercial outfits will move to LAME for encoding, which wouldn't be such a bad thing really.

    If not, then the MP3 format (and the future utility of everyone's existing music libraries) really is in trouble...

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