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Microsoft was ordered by a federal jury yesterday to pay $1.52 billion in a patent dispute over the MP3 format, the technology at the heart of the digital music boom. If upheld on appeal, it would be the largest patent judgment on record.
The ruling, in Federal District Court in San Diego, was a victory for Alcatel-Lucent, the big networking equipment company. Its forebears include Bell Laboratories, which was involved in the development of MP3 almost two decades ago.
At issue is the way the Windows Media Player software from Microsoft plays audio files using MP3, the most common method of distributing music on the Internet. If the ruling stands, Apple and hundreds of other companies that make products that play MP3 files, including portable players, computers and software, could also face demands to pay royalties to Alcatel.
This really has absolutely nothing to do with Microsoft but Lucent cheating the system and scamming Microsoft.
Which means everyone granted use to the MP3 patents is infringing - not just microsoft. Its just microsoft is a ripe target with there surplus of cash compared to VARs and other licensees who wouldn't be worthwhile targets.
Unless there was some punitive damages in there, valuing them at 0.5% of Windows seems a bit too much IMO.