Very few have offered up an opinion on Microsoft being taken to the cleaners by a US jury trial to the tune of $1.52 billion in damages in favor of Alcatel-Lucent for patent infringement relating to the MP3 standard.
But this has the makings of a true ‘home court’ ruling, and there is no way that Lucent, as it was before the merger, actually owned dominant MP3 patents, or that any appeal court will uphold this award. It’s just that a US jury thought so after hearing evidence relating entirely to a couple of patents that Lucent filed, but not the entire MP3 story.
Many companies lay claim to MP3 patents, but one leader in the creation of the technology was Germany research house Fraunhofer Institute. Other contributors are France Telecom, T’l’diffusion de France, Philips and Institut fur Rundfunktechnik and Bayerische Rundfunkwerbung to name but a few and they have defended those rights successfully in European courts. Thomson of France also holds core elements of the patents and acts as the licensing authority for the Fraunhofer Institute in Germany
Of course Microsoft thought it behaved properly by taking a license from Fraunhofer, but this case hinged not around basic MP3 playing, but conversion tools for other audio formats into the MP3 format, and then only on personal computers.
The right outcome is that a patent pool for licensing ALL MP3 patents is set up, but at present the patents are in a handful of separate patent pools. The likelihood it that this payment for a ludicrous amount of money will be overturned and a higher court will push the negotiations along in the right directions to unify MP3 patents. But because this is an international issue it can’t do much more than that. What is needed is these companies have to get together and sort out common ownership or there will be hundreds of more cases on both sides of the Atlantic.