Microsoft hit with $1.5 billion patent violation fine

Microsoft MoneyA federal jury has ruled that Microsoft has to pay $1.5 billion dollars to Alcatel-Lucent for violating two patents the telecommunications equipment maker held related to MP3 audio technology.

Alcatel-Lucent and Fraunhofer worked together to develop the nearly universal digital music format. Microsoft says it paid Fraunhofer $16 million dollars to license the technology for use in its Windows operating systems. The ruling could mean that dozens of other companies that did not license the technology from Alcatel-Lucent could face similar lawsuits in the future, although Microsoft obviously has some of the deepest pockets.

The $1.5 billion figure is based on a percentage of a ll Windows-based PCs sold since 2003. With Windows Vista and Zune sales slow, this is not a good time for Microsoft. Then again, if sales had been slow earlier, the fine wouldn't be so hefty, right?

Microsoft's lawyer says the company plans to seek relief from the court, or possibly to appeal the ruling.

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