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Microsoft Off The Hook In $358 Million Patent Dispute

September 12, 2009

A US federal appeals court announced on Friday that Microsoft Corp. will not be required to dole out $358 million to Alcatel-Lucent for alleged patent infringement because of issues with the way the damages were calculated.

The United States Court of Appeals for the Federal Circuit, which has dealt with plenty of patent and trademark cases, agreed that software giant Microsoft had indirectly infringed the patents of French telecoms equipment firm Alcatel, and that the decision was supported by substantial evidence.

However, the court ruled that the damages being sought were not justified and must be retried.

The patent in question involves a method of entering in formation into fields on a computer screen without having to key it in on a keyboard.

Alcatel-Lucent’s claim against Microsoft is that the company illegally utilized the patented technology to allow users to enter dates into calendars in its Outlook e-mail program, known as the “Day” patent.

Though Alcatel was initially awarded the $358 million in damages just last year, the award has now been overturned.

In its ruling, the court said, “Because the damages award based on the infringing date-picker feature of Outlook is not supported by substantial evidence and is contrary to the clear weight of the evidence, the damages award must be vacated.”

Both companies expressed some measure of happiness with the court’s decision, reported Reuters.

“We are pleased that the court vacated the damages award, and we look forward to taking the next step in the judicial process,” said Microsoft spokesman Kevin Kutz.

From the other side, an Alcatel-Lucent spokeswoman said, “While we are disappointed that the Court did not affirm the jury’s decision on damages, we look forward to an upcoming proceeding to determine the compensation to which Alcatel-Lucent is entitled based on the Court’s finding that Microsoft did use our patented invention.”

This patent suit is the latest of six proceeding from claims that Lucent Technologies Inc. filed in 2003 against PC makers Gateway Inc. and Dell Inc. over technology created by Lucent’s research division Bell Labs.

Microsoft later joined the growing list of defendants, engaging in a very large, long-term, multi-billion dollar dispute with Alcatel-Lucent over the “Day” patent. The rest of the litigation was resolved last December.

Microsoft shares dropped 5 cents at $24.95 on Nasdaq, while Alcatel-Lucent shares increased by 4.9 percent to $4.03 dollars (2.758 euros) in Paris.

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