Alcatel-Lucent seeks to reinstate $1.52 billion Microsoft award

Alcatel-Lucent SA, the world's largest supplier of telecommunications equipment, asked a U.S. court Monday to reinstate a record $1.52 billion patent verdict against Microsoft Corp. over the MP3 digital music standard.

A three-judge panel of the U.S. Court of Appeals for the Federal Circuit heard arguments over whether U.S. District Judge Rudi Brewster erred in throwing out the verdict. Brewster said in August that one Alcatel-Lucent patent wasn't infringed and the second was co-owned by a German research institute that licensed the invention to Microsoft.

"Joint ownership" with the Fraunhofer Institute was intended, giving Microsoft the right to license the technology, John Gartman, an attorney for Microsoft, told the judges in Washington. The MP3 format is used to play music and sound files on computers, mobile phones and digital music players.

A San Diego jury decided in February 2007 that Microsoft must pay $1.52 billion for violating the two patents, the largest patent verdict in U.S. history. Scientists from AT&T Corp.'s Bell Labs unit, which was spun off as Lucent Technologies in 1996, worked with the Fraunhofer Institute to develop the MP3 technology starting in 1989. Alcatel SA acquired Lucent in 2006.

The dispute comes down to what is considered "new work" that has added to the technology, Richard Taranto, an attorney for Paris-based Alcatel-Lucent, told the judges.

The case is Lucent Tech v. Gateway, 07-1546, U.S. Court of Appeals for the Federal Circuit.