A U.S. federal jury found that Microsoft Corp. infringed audio patents held by Alcatel-Lucent and should pay $1.52 billion in damages, the No. 1 software maker said on Thursday.
Alcatel-Lucent had accused the world's biggest software maker of infringing patents related to standards used for playing MP3 digital music files.
One analyst said the decision means Alcatel-Lucent may seek payments from providers of software and hardware that support MP3 files, including Apple Inc.'s iPod and iTunes. "Potentially it's a significant windfall for Alcatel-Lucent," Bernstein analyst Paul Sagawa said.
He said Alcatel-Lucent could go after include MP3 player makers Sony Corp. , Creative Technology Ltd. and music service provuder Napster.
For Microsoft, $1.52 billion represents about six weeks of cash flow or about 15 cents per share -- a charge that most analysts would likely take in stride, according to Goldman Sachs analyst Rick Sherlund.
"While $1.52 billion is a large sum, it is less than the $4.5 billion Alcatel-Lucent originally sought according to other press reports and is not particularly material in our opinion when considered with the amount of cash on Microsoft's balance sheet and substantial free cash flow generation of about $1 billion per month," he wrote in a research note.
The $1.52 billion awarded was based on 0.5 percent of the price of personal computers sold since around mid-2003, Tom Burt, Microsoft's deputy general counsel, said.
"We are concerned that this decision opens the door for Alcatel-Lucent to pursue action against hundreds of other companies who purchased the rights to use MP3 technology from Fraunhofer," Burt said. Computer, cell phone and MP3 player makers may be affected as well as software suppliers, he said. ...Read more here...
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