Is Apple in Alcatel-Lucent’s Crosshairs?
Apple’s licensing of MPEG Layer-3 audio coding technology from Fraunhofer IIS and THOMSON multimedia could spell trouble for Apple if the Alcatel-Lucent vs. Microsoft verdict, handed out by the District Court in San Diego, Calif., yesterday, stands after appeal by Microsoft. Well, that’s what some in the media would like you to think, that is.
Yesterday’s federal court ruling found that Microsoft infringed two Alcatel-Lucent patents in using the MP3 format for playing digital music on their Windows Media Player and was ordered to pay more than $1.5 billion in damages.
Microsoft released a statement yesterday, for attribution to Tom Burt, corporate vice president and deputy general counsel, in response to the District Court finding which stated in part:
“We think this verdict is completely unsupported by the law or the facts. We will seek relief from the trial court, and if necessary appeal.
“Like hundreds of other companies large and small, we believe that we properly licensed MP3 technology from its industry recognized licensor – Fraunhofer. The damages award seems particularly outrageous when you consider we paid Fraunhofer only $16 million to license this technology.” The Fraunhofer Institute was involved, along with the French electronics company Thomson and Bell Labs, in the format’s development.
Various reports have since surfaced suggesting that if the ruling stands, Apple and hundreds of other companies that make products that play MP3 files, including portable players, computers and software, could be forced to pay royalties to Alcatel. Thomson’s mp3licensing webpage does in fact list Apple along with Microsoft and scores of other companies who are recognized licensees.
One of the reports on record, state that Merrill Lynch analysts have told clients that “If Lucent does possess an essential MP3 patent, something we are not qualified to judge, the company could potentially go after Apple, whose iPod can play MP3 files.” Yet that’s too generalized an assessment considering there are more than just two mp3 patents on record.
The listing of patents, found here, only adds to the confusion of the matter at hand. Being that only two Alcatel patents were violated, it would be a stretch at this point in time to assume that Apple’s iTunes uses the very same patent portfolio for their iTunes/iPod that Microsoft used in their Media Player. The two patent infringements have yet to be identified specifically, so how can anyone make such assertions that Apple could be implicated.
For the record, the history of the mp3, according to Thomson, doesn’t even recognize Alcatel, Lucent or Alcatel-Lucent’s role in mp3. They do however recognize AT&T which is connected to this case indirectly. CNET News.com on Friday reported that Microsoft said the verdict was “completely unsupported by the law or the facts” and noted that roughly half of the damages are for overseas sales of Windows. Such damages could be affected by a separate patent case that involves Microsoft and AT&T. That case, currently before the U.S. Supreme Court, deals with whether overseas sales of software products should be subject to U.S. patent law.
The U.S. software industry fears that a ruling against Microsoft could expand its vulnerability in patent infringement suits compared with global rivals and could make it more attractive to locate research operations abroad. AT&T, on the other hand, says software companies need only worry if they’re committing infringement in the first place.”
At the end of the day, it would appear on the surface at least, that the loss for Microsoft against Alcatel-Lucent could have dire consequences in their case with AT&T and that all of this other clatter about how their loss could eventually translate into losses for other mp3 licencees, including Apple, is nothing more than smoke and mirrors for the press.
The bottom line is this. Is Apple in Alcatel-Lucent’s Crosshairs? No one in the press knows that yet, period. What we do know however at this point is simple: Microsoft lost their case, full stop.
Written by Neo.
