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-------------------------------------------------------------- This story was printed from ZDNet Australia. --------------------------------------------------------------
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FAQ: Behind Microsoft's MP3 patent jam By Ina Fried, CNET News.com February 26, 2007 URL: http://www.zdnet.com.au/insight/software/soa/FAQ-Behind-Microsoft-s-MP3-patent-jam/0,139023769,339273828,00.htm
Thursday's ruling that Microsoft owes US$1.5 billion in damages for Windows' use of MP3-related patented technology prompts questions well beyond whether the software giant will take the money out of its checking or savings account. Microsoft will undoubtedly try to have the verdict reduced or reversed. But if it stands, the court order also opens the door for Alcatel-Lucent to pursue damages from other companies that use MP3 music technology in their products. Here is a list of some relevant questions and answers, as best they are known at this point. Why was the award so large? When a big verdict comes in, "it's called ringing the bell," said Lee Bromberg, a partner at Bromberg & Sunstein. "This is a really loud ringing of the bell." Will Microsoft appeal? What are the odds that it will be overturned? "There is generally a reluctance to second-guess them," Bromberg said. That said, there are plenty of other items that will be heavily contested, including the way that the jury decided on the value of damages. "That is definitely an issue that is going to be fought about," Bromberg said. Will Alcatel-Lucent go after other companies that use MP3 in their products? "There are different strategies that Alcatel-Lucent could take," said Robert Yoches, a partner at Finnegan Henderson Farabow Garrett & Dunner. If the company believes that the Microsoft verdict is likely to yield the most money it will get from an MP3 patent lawsuit, it might not want to take other companies to court and thus risk another court invalidating its patent, Yoches said. If, on the other hand, it thinks that there is even more money to be had from lawsuits against other companies, it might settle with Microsoft for somewhat less and then go after them. "When you get $1.5 billion, it's hard not to start looking around," Yoches said. I have an MP3 player. Could I be liable? "It's very rare for a patent owner to go after retail customers," Bromberg said. "The sales to customers are what creates value for the patent holder." What was Alcatel-Lucent's role in developing MP3? Didn't Microsoft already license the technology from Fraunhofer? Why is the verdict so much larger than what Microsoft paid Fraunhofer? He pointed to the Research In Motion-NTP case, in which RIM ignored early offers to settle for a few million dollars and eventually agreed to a US$612 million settlement. Who else licenses the MP3 technology?
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