Alcatel/Microsoft MP3 patent row - Apple could be the next target

The MP3 patent row that erupted between Microsoft and Alcatel-Lucent could have an enormous effect on the entire MP3 industry. The Federal District Court in San Diego ruling that Microsoft must pay Alcatel $1.52bn (the largest patent award in history) could see hundreds of other firms, such as Apple and Creative, having to pay to use the format.

The MP3 patent row that erupted between Microsoft and Alcatel-Lucent could have an enormous effect on the entire MP3 industry.  The Federal District Court in San Diego ruling that Microsoft must pay Alcatel $1.52bn (the largest patent award in history) could see hundreds of other firms, such as Apple and Creative, having to pay to use the MP3 format.

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Apple has the greatest exposure and the most to loseThe crux of the case is whether Alcatel-Lucent should be paid for technology developed by the Fraunhofer Institute and Bell Laboratories before Alcatel took over ownership of these companies.

Microsoft claims that no fees are due since it paid $16m to license the MP3 technology from the Fraunhofer Institute.

However, Alcatel sees things differently.  It claims that now they own Bell, Microsoft should now be paying them for using the patent.

Now that the courts have awarded Alcatel this record patent award from Microsoft, other companies who make use of MP3 could have to pay up.  Four companies that spring to mind as using the MP3 standard are Apple, on RealNetworks, Sony, and Creative.  Of these four companies, Apple has the greatest exposure and the most to lose. 

Microsoft plans to appeal and I bet that this could be the first time that Steve Jobs has hoped that Microsoft is successful in court!

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