Microsoft wins Alcatel-Lucent patent appeal

A US federal appeals court has upheld a lower court ruling that Microsoft infringed a patent belonging to Alcatel-Lucent, but indicated that the US$358m (AU$415m) in damages awarded by a jury was excessive.

The US Court of Appeals for the Federal Circuit in Washington DC ruled that there was not enough evidence to support the calculation for damages, which it felt was disproportionate to the seriousness of the violation. The court did not suggest an approved means for calculating a new settlement, however.

The patent in question covers a means of entering information into fields on a computer screen without a keyboard. The court found that the 'date-picker' calendar tool in Microsoft Outlook, and similar functionality in Microsoft Money and Microsoft Mobile, infringed on the so-called 'Day patent', but said that there was no evidence of the tool's widespread use by customers.

"The portion of the profit that can be credited to the infringing use of the date-picker tool is exceedingly small," the ruling said. "In short, Outlook is an enormously complex software program comprising hundreds, if not thousands or even more, features. We find it inconceivable to conclude, based on the present record, that the use of one small feature, the date-picker, constitutes a substantial portion of the value of Outlook."

Alcatel-Lucent had argued that it was entitled to damages worth eight percent of Microsoft's revenues. The court stated that the jury either used this percentage figure as the basis of its calculation, or took into account the entire market value of the software that included the feature.

Microsoft, on the other hand, suggested that a figure of US$6.5m (AU$7.5m) was more reasonable. Both companies said that they were pleased with the outcome and were looking forward to the next step in the judicial process.

Alacatel-Lucent initially sued PC manufacturer Gateway for infringement of its patent in 2002, but also took action against Microsoft when the software giant intervened. Dell is cited as the third defendant in the case.

The legal action is just the latest in a number of patent infringement cases that the two companies have instigated against each other over the years. Other actions have related to the MP3 format and digital speech compression technology.