Technology companies using the MP3 format could be hit with legal claims after Microsoft was fined $1.5 billion dollars by a Californian court for violating MP3 patents belonging to Alcatel-Lucent
Microsoft is to pay the damages to telecommunications equipment company Alcatel-Lucent, after being found guilty of infringing patents for the technology used to play digital music.
Alcatel-Lucent was awarded the $1.5 billion by a California jury yesterday.
The verdict potentially opens the way for many more lawsuits by Alcatel-Lucent against the other companies that have licensed MP3.
But some analysts say Alcatel-Lucent will more likely negotiate new licensing pacts with other MP3 users to force them to hand over royalties.
The San Diego trial centred on the question whether Alcatel-Lucent should be paid for technology developed by experts at Germany's Fraunhofer Institute and Bell Laboratories - which Alcatel now owns.
Alcatel-Lucent argued that technology used to encode and decode digital audio files in Media Player infringed on its patents.
But Microsoft insisted it had paid $16m license fees to the Munich-based Fraunhofer Institute for the technology and violated no patent rights.
However, Alcatel claims that as it now owns Bell, and has done since 2003, Microsoft should have been paying it for its share of the patent.
Microsoft plans to appeal the jury's decision.
