Steve Jobs Sleeps A Little Easier On His Big Pile Of Money As Microsoft MP3 Verdict Is Overturned

A California jury slapped $1.52 billion in damages on Microsoft earlier this year in a lawsuit filed by French company Alcatel-Lucent, which claimed that Microsoft’s MP3 software infringed on several of Alcatel-Lucent’s MP3-related patents. Microsoft counterclaimed that the liscensing fees for the various products the company uses were all paid up to the appropriate parties, and Alcatel-Lucent wasn’t one of them. A San Diego judge agreed yesterday and overturned the verdict, allowing the digital end of the music biz to sigh in relief that their livelihoods were no longer on the chopping block:

Alcatel-Lucent argued in court that technology used to encode and decode digital audio files in Media Player infringed on two of its patents.

Microsoft said that it had paid Munich-based licensing firm Fraunhofer-Gesellschaft 16 million dollars to legally use the disputed MP3 technology.

In his ruling, Brewster concluded that the US software giant did not infringe on one of the patents and that Fraunhofer would need to join Alcatel-Lucent’s infringement suit for it to be valid in court.

Bell Labs, which was later swallowed up by Lucent, which was later swallowed up by Alcatel, helped to create the MP3 along with Fraunhofer over a decade ago. If the jury’s verdict had been upheld, it’s possible that any company which sells MP3s or uses/sells technology that incorporates MP3s would have had to pay up had Alcatel-Lucent come calling on them. As Hypebot also notes, the cost of MP3s and related hardware and software may have also risen due to a new set of royalties and/or licensing fees that would have had to have been paid to the company.

Digital Music Dodges A Bullet As MP3 Ruling Overturned [Hypebot] Court Drops Microsoft’s 1.5 Billion Dollar Fine [Yahoo via AFP]