Alcatel-Lucent v. Microsoft
Encyclopedia
Lucent Technologies Inc. v. Gateway Inc. 470 F.Supp.2d 1180 (S.D.Cal.,2007) is a patent case between Alcatel-Lucent and Microsoft litigated in the United States District Court for the Southern District of California
and appealed to the United States Court of Appeals for the Federal Circuit
. The litigation money involved was $1.53 billion for the first patent infringement
case. Its final verdict was given in August 2007 at the U.S. District Court for the Southern District of California
in San Diego. The damages award was reversed on appeal in September 2009 and returned for a separate trial on the amount of damages.
(acquired by Alcatel
in 2006) filed suit against Gateway
and Dell
in U.S. District Court, San Diego, California. Lucent claimed in this first San Diego case that Dell and Gateway had violated patents on MP3-related technologies developed by Bell Labs
, a division of predecessor company American Telephone & Telegraph
. Other patents said to be infringed relate to MPEG video technology, speech technology, internet technology, and other technologies. Microsoft voluntarily joined the lawsuit in April 2003 and Alcatel was added after it acquired Lucent.
After the first San Diego lawsuit was filed, Microsoft and Lucent have filed additional patent lawsuits against each other.
In February 2007, Microsoft filed a lawsuit at the International Trade Commission claiming that Alcatel-Lucent infringed its patents.
There is a second case in San Diego where Microsoft is asserting that Alcatel-Lucent infringes 10 of its patents, and yet another case in Texas where each alleges that the other is infringing its patents.
claims ownership of several patent
s relating to MP3
and MPEG encoding and compression technologies, as well as other technologies. The patents were obtained as the result of work done at Bell Labs
before the breakup of American Telephone & Telegraph
.
Certain patents at issue were:
U.S. Patent No. 5,341,457, Perceptual Coding of Audio Signals, to Joseph L. Hall and James D. Johnston. Filed: August 20, 1993 Granted: August 23, 1994
U.S. Reissue Patent No. RE39,080, Rate loop processor for perceptual encoder/decoder, to James D. Johnston. Filed: August 13, 2002. Reissue of 05627938 Filed: Sep., 1994 Granted: May., 1997
, who worked with Johnston at Bell Labs.
On February 22, 2007, a San Diego jury found for Alcatel-Lucent and against Microsoft. Alcatel-Lucent was awarded a record-breaking $1.52 billion in damages. The damages could have been $4.5 billion but the jury was unable to decide if the infringement was "willful." Microsoft disputed the verdict, maintaining that the federal jury's decision was "unsupported by the law or facts", since Microsoft had already paid $16 million to license the technology from Fraunhofer IIS
which, it claims, is "the industry-recognized rightful licensor".
Subsequently, on August 6, 2007 the federal judge in San Diego, U.S. District Judge Rudi Brewster, granted Microsoft's motions for Judgment as a matter of law
(JMOL) and for new trial, saying that the jury's decision was not supported by the evidence. The Judge's Order found that there was insufficient evidence both for Microsoft's liability and for the damages model used by Alcatel-Lucent. Alcatel-Lucent appealed the judge's decision, and the Court of Appeals for the Federal Circuit heard oral arguments in July 2007. The Court of Appeals published its decision on September 25, 2008, upholding the dismissal of the case by Judge Brewster on two grounds. The court held that Fraunhofer was a joint developer and thus co-owner of one patent, which meant that Lucent lacked standing
to sue. The other patent was not infringed because Lucent failed to show that the patented algorithm was ever used by Microsoft's products.
A week after the first jury verdict, on March 2, Judge Brewster granted summary judgment
in the second part of the case that Microsoft had not violated Alcatel-Lucent's patents relating to speech recognition, and the case was therefore dismissed before going to trial. Alcatel-Lucent stated that it intended to appeal.
The trial in the third part of the San Diego case involved four patents. In April 2008, a jury awarded Alcatel-Lucent $367.4 million in damages after finding that Microsoft had violated two patents related to the user interface in its software. One of the patents found infringed by Microsoft's Tablet PC
products involved technology originally developed by GO Corp.
concerning gestures using a stylus on a tablet computer. (Microsoft's acquisition of the technology is the subject of a separate antitrust
lawsuit against Microsoft
.) The bulk of the damages award resulted from the jury's finding infringement of another patent titled "Touch Screen Form Entry System" that was found to cover form entry methods in Microsoft's Outlook
and other products. In June 2008, the trial judge upheld the jury's verdict and increased the damage award against Microsoft to $512 million to account for interest.
In the fourth San Diego case, the jury issued its verdict on June 2, 2008. This time both Microsoft and Lucent were asserting that the other side was infringing its patents. The jury found that Lucent did not infringe Microsoft's patents (and one patent was invalid) and that Microsoft's Xbox
did not infringe Lucent's patent.
United States District Court for the Southern District of California
The United States District Court for the Southern District of California is the federal district court whose jurisdiction comprises the following counties in California: Imperial and San Diego. In terms of filed indictments, it is one of the busiest criminal districts in the United States...
and appealed to the United States Court of Appeals for the Federal Circuit
United States Court of Appeals for the Federal Circuit
-Vacancies and pending nominations:-List of former judges:-Chief judges:Notwithstanding the foregoing, when the court was initially created, Congress had to resolve which chief judge of the predecessor courts would become the first chief judge...
. The litigation money involved was $1.53 billion for the first patent infringement
Patent infringement
Patent infringement is the commission of a prohibited act with respect to a patented invention without permission from the patent holder. Permission may typically be granted in the form of a license. The definition of patent infringement may vary by jurisdiction, but it typically includes using or...
case. Its final verdict was given in August 2007 at the U.S. District Court for the Southern District of California
United States District Court for the Southern District of California
The United States District Court for the Southern District of California is the federal district court whose jurisdiction comprises the following counties in California: Imperial and San Diego. In terms of filed indictments, it is one of the busiest criminal districts in the United States...
in San Diego. The damages award was reversed on appeal in September 2009 and returned for a separate trial on the amount of damages.
Origin
The dispute between Microsoft and Lucent (and later Alcatel-Lucent) began in 2003 when Lucent TechnologiesLucent Technologies
Alcatel-Lucent USA, Inc., originally Lucent Technologies, Inc. is a French-owned technology company composed of what was formerly AT&T Technologies, which included Western Electric and Bell Labs...
(acquired by Alcatel
Alcatel
Alcatel Mobile Phones is a brand of mobile handsets. It was established in 2004 as a joint venture between Alcatel-Lucent of France and TCL Communication of China....
in 2006) filed suit against Gateway
Gateway, Inc.
Gateway Computer Corporation, is a computer hardware company headquartered in Irvine, California, USA which develops, manufactures, supports, and markets a wide range of personal computers, computer monitors, servers, and computer accessories...
and Dell
Dell
Dell, Inc. is an American multinational information technology corporation based in 1 Dell Way, Round Rock, Texas, United States, that develops, sells and supports computers and related products and services. Bearing the name of its founder, Michael Dell, the company is one of the largest...
in U.S. District Court, San Diego, California. Lucent claimed in this first San Diego case that Dell and Gateway had violated patents on MP3-related technologies developed by Bell Labs
Bell Labs
Bell Laboratories is the research and development subsidiary of the French-owned Alcatel-Lucent and previously of the American Telephone & Telegraph Company , half-owned through its Western Electric manufacturing subsidiary.Bell Laboratories operates its...
, a division of predecessor company American Telephone & Telegraph
American Telephone & Telegraph
AT&T Corp., originally American Telephone and Telegraph Company, is an American telecommunications company that provides voice, video, data, and Internet telecommunications and professional services to businesses, consumers, and government agencies. AT&T is the oldest telecommunications company...
. Other patents said to be infringed relate to MPEG video technology, speech technology, internet technology, and other technologies. Microsoft voluntarily joined the lawsuit in April 2003 and Alcatel was added after it acquired Lucent.
After the first San Diego lawsuit was filed, Microsoft and Lucent have filed additional patent lawsuits against each other.
In February 2007, Microsoft filed a lawsuit at the International Trade Commission claiming that Alcatel-Lucent infringed its patents.
There is a second case in San Diego where Microsoft is asserting that Alcatel-Lucent infringes 10 of its patents, and yet another case in Texas where each alleges that the other is infringing its patents.
Patents
In the first San Diego case, Alcatel-LucentAlcatel-Lucent
Alcatel-Lucent is a global telecommunications corporation, headquartered in the 7th arrondissement of Paris, France. It provides telecommunications solutions to service providers, enterprises, and governments around the world, enabling these customers to deliver voice, data, and video services...
claims ownership of several patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
s relating to MP3
MP3
MPEG-1 or MPEG-2 Audio Layer III, more commonly referred to as MP3, is a patented digital audio encoding format using a form of lossy data compression...
and MPEG encoding and compression technologies, as well as other technologies. The patents were obtained as the result of work done at Bell Labs
Bell Labs
Bell Laboratories is the research and development subsidiary of the French-owned Alcatel-Lucent and previously of the American Telephone & Telegraph Company , half-owned through its Western Electric manufacturing subsidiary.Bell Laboratories operates its...
before the breakup of American Telephone & Telegraph
American Telephone & Telegraph
AT&T Corp., originally American Telephone and Telegraph Company, is an American telecommunications company that provides voice, video, data, and Internet telecommunications and professional services to businesses, consumers, and government agencies. AT&T is the oldest telecommunications company...
.
Certain patents at issue were:
U.S. Patent No. 5,341,457, Perceptual Coding of Audio Signals, to Joseph L. Hall and James D. Johnston. Filed: August 20, 1993 Granted: August 23, 1994
U.S. Reissue Patent No. RE39,080, Rate loop processor for perceptual encoder/decoder, to James D. Johnston. Filed: August 13, 2002. Reissue of 05627938 Filed: Sep., 1994 Granted: May., 1997
Trials
The first part of the San Diego case involved the '457 and '080 audio coding patents. Alcatel-Lucent claimed that Microsoft's Windows Media Player infringed these patents by virtue of its MP3 capabilities. Testimony was given by inventors James Johnston and Joseph Hall. Coincidently, AT&T inventor James Johnston was employed by Microsoft post-AT&T breakup and during the trial. Additional testimony was taken from Dr. Karlheinz BrandenburgKarlheinz Brandenburg
Karlheinz Brandenburg is an audio engineer who has contributed to the audio compression format MPEG Audio Layer 3, more commonly known as MP3.- Biography :...
, who worked with Johnston at Bell Labs.
On February 22, 2007, a San Diego jury found for Alcatel-Lucent and against Microsoft. Alcatel-Lucent was awarded a record-breaking $1.52 billion in damages. The damages could have been $4.5 billion but the jury was unable to decide if the infringement was "willful." Microsoft disputed the verdict, maintaining that the federal jury's decision was "unsupported by the law or facts", since Microsoft had already paid $16 million to license the technology from Fraunhofer IIS
Fraunhofer Society
The Fraunhofer Society is a German research organization with 60 institutes spread throughout Germany, each focusing on different fields of applied science . It employs around 18,000, mainly scientists and engineers, with an annual research budget of about €1.65 billion...
which, it claims, is "the industry-recognized rightful licensor".
Subsequently, on August 6, 2007 the federal judge in San Diego, U.S. District Judge Rudi Brewster, granted Microsoft's motions for Judgment as a matter of law
Judgment as a matter of law
Judgment as a matter of law is a motion made by a party, during trial, claiming the opposing party has insufficient evidence to reasonably support its case. JMOL is also known as a directed verdict, which it has replaced in American Federal courts.JMOL is similar to judgment on the pleadings and...
(JMOL) and for new trial, saying that the jury's decision was not supported by the evidence. The Judge's Order found that there was insufficient evidence both for Microsoft's liability and for the damages model used by Alcatel-Lucent. Alcatel-Lucent appealed the judge's decision, and the Court of Appeals for the Federal Circuit heard oral arguments in July 2007. The Court of Appeals published its decision on September 25, 2008, upholding the dismissal of the case by Judge Brewster on two grounds. The court held that Fraunhofer was a joint developer and thus co-owner of one patent, which meant that Lucent lacked standing
Standing (law)
In law, standing or locus standi is the term for the ability of a party to demonstrate to the court sufficient connection to and harm from the law or action challenged to support that party's participation in the case...
to sue. The other patent was not infringed because Lucent failed to show that the patented algorithm was ever used by Microsoft's products.
A week after the first jury verdict, on March 2, Judge Brewster granted summary judgment
Summary judgment
In law, a summary judgment is a determination made by a court without a full trial. Such a judgment may be issued as to the merits of an entire case, or of specific issues in that case....
in the second part of the case that Microsoft had not violated Alcatel-Lucent's patents relating to speech recognition, and the case was therefore dismissed before going to trial. Alcatel-Lucent stated that it intended to appeal.
The trial in the third part of the San Diego case involved four patents. In April 2008, a jury awarded Alcatel-Lucent $367.4 million in damages after finding that Microsoft had violated two patents related to the user interface in its software. One of the patents found infringed by Microsoft's Tablet PC
Microsoft Tablet PC
A Microsoft Tablet PC is a term coined by Microsoft for tablet computers conforming to a set of specifications announced in 2001 by Microsoft, for a pen-enabled personal computer, conforming to hardware specifications devised by Microsoft and running a licensed copy of Windows XP Tablet PC Edition...
products involved technology originally developed by GO Corp.
GO Corp.
GO Corporation was founded in 1987 to create portable computers, an operating system, and software with a pen-based user interface. It was famous not only for its pioneering work in Pen-based computing but as well as being one of the most well-funded start-up companies of its time.Though the...
concerning gestures using a stylus on a tablet computer. (Microsoft's acquisition of the technology is the subject of a separate antitrust
Antitrust
The United States antitrust law is a body of laws that prohibits anti-competitive behavior and unfair business practices. Antitrust laws are intended to encourage competition in the marketplace. These competition laws make illegal certain practices deemed to hurt businesses or consumers or both,...
lawsuit against Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
.) The bulk of the damages award resulted from the jury's finding infringement of another patent titled "Touch Screen Form Entry System" that was found to cover form entry methods in Microsoft's Outlook
Microsoft Outlook
Microsoft Outlook is a personal information manager from Microsoft, available both as a separate application as well as a part of the Microsoft Office suite...
and other products. In June 2008, the trial judge upheld the jury's verdict and increased the damage award against Microsoft to $512 million to account for interest.
In the fourth San Diego case, the jury issued its verdict on June 2, 2008. This time both Microsoft and Lucent were asserting that the other side was infringing its patents. The jury found that Lucent did not infringe Microsoft's patents (and one patent was invalid) and that Microsoft's Xbox
Xbox
The Xbox is a sixth-generation video game console manufactured by Microsoft. It was released on November 15, 2001 in North America, February 22, 2002 in Japan, and March 14, 2002 in Australia and Europe and is the predecessor to the Xbox 360. It was Microsoft's first foray into the gaming console...
did not infringe Lucent's patent.