Microsoft's $1.5 billion fine in Alcatel-Lucent case dropped

07 August 2007

Mumbai: A US federal judge in San Diego has reversed an earlier jury decision ordering Microsoft Corporation to pay phone company Alcatel-Lucent $1.5 billion (£740 million) for infringing music patents.

The French telecom equipment maker, however, argues that the jury''s original $1.5 billion fine should have stood in MP3 patent case and that it will appeal the federal court decision.

The fine, imposed six months ago, was the largest ever handed down by a US jury in a patent infringement case. The ruling could yet have an effect on the wider digital music market, analysts said.

The jury, which ruled that Microsoft''s Media Player software infringed on two Alcatel patents, had imposed a $1.5 billion (£740 million) fine on Microsoft in March.

Both patents regarded how audio was converted into MP3 files.