Microsoft MP3 patent row looms over Apple
A bitter defeat handed to Microsoft in an audio patent lawsuit late last week became a hollow victory for its rivals, as the new legal precedent threatened to swallow the digital music business whole.
Microsoft was dealt a serious blow late on Thursday when a federal jury handed Alcatel-Lucent a hefty $1.52 billion-dollar payout in a patent dispute, agreeing with the plaintiff that Redmond had illegally used technology from fifteen patents relating to the MP3 music format in Windows Media Player. The damages were based on Dell and Gateway PC sales since the suit began in May 2003, as both system builders were the defendants until attention shifted to Microsoft's jukebox software.
Alcatel-Lucent successfully claimed in court that its co-development of the audio codec with Germany's Fraunhofer Institute, and the resulting patents gleaned from its half of the process, gave it the right to license the technology to companies that wanted MP3 playback in their hardware and software. This left Microsoft -- which had taken the industry-standard route of licensing through Fraunhofer for a much smaller $16 million -- more than slightly upset over the ruling.
"Today's outcome is disappointing for us and for the hundreds of other companies who have licensed MP3 technology," Microsoft said in a statement after the decision. "We contend that there was no infringement of any kind and that we have paid the appropriate license fees for any technology that is used in our products."
Predictably, the company intends to fight tooth-and-nail against the ruling and said it would ask the presiding judge to override the jury's opinion based on both the lack of merit and the seemingly excessive penalty fee. An appeal would follow if the judge upheld the verdict, Microsoft said.
If the software developer loses its case, however, the ramifications could be as grave as the company suggests. A definitive Alcatel-Lucent win would give the latter potential free rein over almost any business that has dealt in MP3 music, many of whom logically assumed that a license from Fraunhofer was the only license they needed.
The situation would be especially damaging to Apple. Most of what the Cupertino-based firm has developed in the past several years, from its iTunes software (preloaded on every Mac sold) to the iPod, has depended on MP3 support as a key selling point and could be the target of legal action. Future devices and programs could also be subjected to higher licensing fees for MP3 decoding if Fraunhofer continues to ask for a separate share.
Observers may get a taste of what's to come for Apple by tracking the success of Alcatel-Lucent's next moves: the America-France partnership already has a string of lawsuits in the works against Microsoft covering a wide array of other patents that might have been infringed, affecting everything from digital video to the Xbox 360.
Microsoft was dealt a serious blow late on Thursday when a federal jury handed Alcatel-Lucent a hefty $1.52 billion-dollar payout in a patent dispute, agreeing with the plaintiff that Redmond had illegally used technology from fifteen patents relating to the MP3 music format in Windows Media Player. The damages were based on Dell and Gateway PC sales since the suit began in May 2003, as both system builders were the defendants until attention shifted to Microsoft's jukebox software.
Alcatel-Lucent successfully claimed in court that its co-development of the audio codec with Germany's Fraunhofer Institute, and the resulting patents gleaned from its half of the process, gave it the right to license the technology to companies that wanted MP3 playback in their hardware and software. This left Microsoft -- which had taken the industry-standard route of licensing through Fraunhofer for a much smaller $16 million -- more than slightly upset over the ruling.
"Today's outcome is disappointing for us and for the hundreds of other companies who have licensed MP3 technology," Microsoft said in a statement after the decision. "We contend that there was no infringement of any kind and that we have paid the appropriate license fees for any technology that is used in our products."
Predictably, the company intends to fight tooth-and-nail against the ruling and said it would ask the presiding judge to override the jury's opinion based on both the lack of merit and the seemingly excessive penalty fee. An appeal would follow if the judge upheld the verdict, Microsoft said.
If the software developer loses its case, however, the ramifications could be as grave as the company suggests. A definitive Alcatel-Lucent win would give the latter potential free rein over almost any business that has dealt in MP3 music, many of whom logically assumed that a license from Fraunhofer was the only license they needed.
The situation would be especially damaging to Apple. Most of what the Cupertino-based firm has developed in the past several years, from its iTunes software (preloaded on every Mac sold) to the iPod, has depended on MP3 support as a key selling point and could be the target of legal action. Future devices and programs could also be subjected to higher licensing fees for MP3 decoding if Fraunhofer continues to ask for a separate share.
Observers may get a taste of what's to come for Apple by tracking the success of Alcatel-Lucent's next moves: the America-France partnership already has a string of lawsuits in the works against Microsoft covering a wide array of other patents that might have been infringed, affecting everything from digital video to the Xbox 360.
Comments
THIS is why software patents must be stamped out. All they do is create problems for *ALL* companies. Yes, even the ones that hold the patents, because surely they're using technology patented by *OTHER* companies.
It's a big waste of money, time and sanity and only the lawyers get richer as a result.
Software patents need to die. NOW.
-Z
The Linux/Free & Open Source Software cultists have been raving about MP3 being evil (aka non-open source) technology for ever. "MP3's evil! Use OGG!" Maybe they're right.
I like Linux, I use it, it's annoying when you use a distro and try to play an MP3 song and it tells you that MP3 isn't open source so they don't support it but here's a link to a how-to, which we don't condon and shame on you for even thinking about it, that will explain how you can enable apt-get to access the Dark Side of the debs where non-free packages are lurking, Sirens waiting to ensnare you. And then you can play MP3's if you check the disclaimer box that says you know you're doing something illegal but don't give a s***. [hyperbole mine]
Imagine if MS, Apple, Dell, Gateway, and all the others suddenly dropped MP3 and went to OGG. There'd be mass confusion, people would have to convert thier music libraries to OGG. But if might be a fun ride.
It'll never happen.
IMHO: The Fraunhofer Institute should pay Alcatel-Lucent half the fees they've been collecting all this time, and leave the companies that have been paying all this time alone.
The Linux/Free & Open Source Software cultists have been raving about MP3 being evil (aka non-open source) technology for ever. "MP3's evil! Use OGG!" Maybe they're right.
I like Linux, I use it, it's annoying when you use a distro and try to play an MP3 song and it tells you that MP3 isn't open source so they don't support it but here's a link to a how-to, which we don't condon and shame on you for even thinking about it, that will explain how you can enable apt-get to access the Dark Side of the debs where non-free packages are lurking, Sirens waiting to ensnare you. And then you can play MP3's if you check the disclaimer box that says you know you're doing something illegal but don't give a s***. [hyperbole mine]
Imagine if MS, Apple, Dell, Gateway, and all the others suddenly dropped MP3 and went to OGG. There'd be mass confusion, people would have to convert thier music libraries to OGG. But if might be a fun ride.
It'll never happen.
It'll never happen that way, but adding OGG support on top of MP3 support and gradually phasing out MP3 support is possible. When iPods stopped supporting MP3, iTunes could offer to automatically convert any MP3s to OGG or AAC just like it does with WMA.
And I agree, software patents need to die a swift and painful death.
Since iTunes does have the capability to playback MP3's and create MP3's, I guess that's one downside.
Software patents need to die. NOW.
As a software developer, I wholeheartedly agree. I work for a company which holds a number of software patents, and I can tell you that the only reason they/we hold patents is in the case where another company sues us. So that we can hopefully leverage our existing patents and find something the other company infringes on and then settle out of court.
Most companies behave this way with regard to patents (only going on the offensive for cases where a direct competitor is obviously copying their technology). However, when things get desperate and companies are flailing for their lives, they start to get desperate and tend to go on the offensive with any and all patents they hold. It's sad really -- and it's the reason why software patents are despised throughout the industry.
my first post here.
This remindes me of the GIF debacle back in the 90's.
I then started to use PNG more.
Surely "Fraunhofer" should have made MS aware that they must also pay "Alcatel-Lucent" to fully complete the patent at the time.
Not doing so voids their win in court?
It does sound like business greed/blackmail to me.
I also wonder about how well the Jury was aware of computing generally and how they came to this decision.
You can convert MP3's to AAC manually, just did it with Paul Carrack's "Don't Shed A Tear" (how apt). However an automatic way (as said before) to convert any imported MP3 would be easier.
OGG would be a good replacement for MP3.
If Alcatel-Lucent/Fraunhofer pursue more companies they may shoot themselves in the foot
as people will abandon MP3.
Just my thoughts.
All will be ok folks.
Apple is often ahead of the curve on this stuff. I wouldn't be surprised if we get a press release tomorrow about Apple licensing MP3 from Alcatel-Lucent. For Apple it prevents an expensive lawsuit, and for Alcatel-Lucent they'll have a solid license agreement to show precedent in court.
Or, maybe Apple could just buy Alcatel-Lucent. There's a hefty $1.5bn of income coming shortly that could help act as a sweetener!
1,500,000,000 dollars!!
Jesus, that's a lot of money for a court settlement
And for what? A technology that people have been using for about 15 years now? Clearly I'm in the wrong job - we should all become lawyers and sue the pants of eachother
Wow!
1,500,000,000 dollars!!
Jesus, that's a lot of money for a court settlement
And for what? A technology that people have been using for about 15 years now? Clearly I'm in the wrong job - we should all become lawyers and sue the pants of eachother
yes, but then the only pants you'd have would be someone else's, and they wouldn't fit right. So all the adults would be walking around in hip huggers two sizes too small, and all the kids would be running around in super baggy jeans four sizes too.... oh, wait.... never mind.
ok, on a serious note, I second the remark about a slow transition from mp3 to ogg or even just aac. It's been on it's way for years anyway. Less than five percent of my audio library is in mp3 format, and most of those are free music (YES! IT DOES EXIST!) I downloaded from iCompositions or the like. I prefer AAC to MP3 because it's half the size for the same quality (or damn near, anyway). When I had a windows machine, I only used WMA, for the same reason. MP3 is dying the slow death of an old standard. If ogg, which I know nothing about, offers similar quality and compression benefits, then it very well may take over. Especially if the music industry eventually goes in the "Thoughts on Music" direction. I suspect that AAC will be around for a while even if though, as it was, if I recall, selected as the MPEG 4 standard format. Someone fact check that for me, eh?
Doesn't Apple use AAC for all of it's iTunes STORE songs? So how could that get affected?
Apple does use MP3 technology in a lot of its products.
Whether that's sufficient to subject the company to liability is a question of law.
And people wonder why software patents are a bad idea.
THIS is why software patents must be stamped out. All they do is create problems for *ALL* companies. Yes, even the ones that hold the patents, because surely they're using technology patented by *OTHER* companies.
It's a big waste of money, time and sanity and only the lawyers get richer as a result.
Software patents need to die. NOW.
-Z
Will SJ, who gave us his views on the DRM and now teacher unions, if he will enlighten us regarding patents.
After all, didn't Steve say during the iPhone announcement... "and boy have we patented it!"
I agree with Auxio, "I work for a company which holds a number of software patents, and I can tell you that the only reason they/we hold patents is in the case where another company sues us. So that we can hopefully leverage our existing patents and find something the other company infringes on and then settle out of court."
I call Patent Troll.
I also think that the court needs to address a MUCH NEEDED statute of limitations on royalty collections.
to Alcatel-Lucent:
I'd say if you were too busy to try and get those royalties in the same YEAR that fraunhoffer got theirs then you missed your oportunity. Shame on you for waiting so long. I personally plan to boycott anything with Alcatel or Lucent technology inside if this court decision is not overturned.
I also think that the court needs to address a MUCH NEEDED statute of limitations on royalty collections.
I'm guessing there already is a statute of limitations for bringing those types of actions in this area of law.
As a software developer, I wholeheartedly agree. I work for a company which holds a number of software patents, and I can tell you that the only reason they/we hold patents is in the case where another company sues us. So that we can hopefully leverage our existing patents and find something the other company infringes on and then settle out of court.
Most companies behave this way with regard to patents (only going on the offensive for cases where a direct competitor is obviously copying their technology). However, when things get desperate and companies are flailing for their lives, they start to get desperate and tend to go on the offensive with any and all patents they hold. It's sad really -- and it's the reason why software patents are despised throughout the industry.
As a software developer, I wholeheartedly disagree. I was part of a company which developed some rather innovative stuff, and had the original founder and a couple of his friends jump ship, start another company, and get a new round of financiers. Obviously it's a lot easier to copy something than to develop it the first time, and without patent protection he would have gotten away with it.
I think it's pretty obvious that the countries with stronger IP laws tend to be the ones with a better high-tech industry, and I don't think that's coincidence. I agree that sometimes patents are mis-used, just like any other tool. But the answer isn't to scrap the tool, it's to improve the oversight. Unless and until software is something that takes no thought or effort to develop and there is no more innovation in the industry, we'll need software patents to protect the original developers from the copycats.
Incidentally, I think the biggest anti-patent folks are the ones in the FOSS community, who make their living for the most part copying the ideas of the commercial software industry. Every once in awhile something innovative happens in FOSS, but generally it's a chorus of "I hope someone makes a FOSS version of X", where X is some product that took substantial development effort to produce. That kind of attitude gets me annoyed.
we should all become lawyers and sue the pants of eachother
"You don't have to sue me to get my pants off". - C.M. Burns
After all, didn't Steve say during the iPhone announcement... "and boy have we patented it!"
I think Steve said that to dispel any worries of another "blackberry" debacle. I may be worng...
Apple, phone makers, and Adobe (for Flash) seem like logical targets next. But this will all take a long time I bet.