Microsoft let off $1.5bn hook

An American judge has overturned a patent infringement case between Microsoft and Alcatel-Lucent - but there are more cases to come.

NEW YORK - A US judge has reversed a jury's ruling that Microsoft Corp had infringed patents held by Alcatel-Lucent and threw out a record $1.5 billion ($NZ1.96) verdict against the world's largest software maker.

US District Judge Rudi Brewster said in a 43-page order that the jury's damages could not stand because Microsoft had not violated one of the two patents related to MP3 music files at the heart of the case.

The judge also called into question the second patent claim in the case and said a new trial may be needed to determine the ownership of that patent.

Microsoft has claimed that it had already licensed the MP3 technology in question from German research organisation Fraunhofer Gesellschaft for $16 million.

Microsoft and Alcatel-Lucent are locked in a number of patent disputes including a suit over the video-decoding technology in Microsoft's Xbox 360 video game console.

Alcatel-Lucent spokeswoman Mary Ward said the reversal was "shocking and disturbing" and the company planned to appeal the latest decision. Microsoft said it plans to issue a statement shortly about the decision.

- REUTERS