Bloomberg News

Microsoft’s Alcatel Infringement Was Pervasive, Lawyer Says

July 27, 2011

(Updates with damages estimates in ninth, 10th paragraphs.)

July 27 (Bloomberg) -- Microsoft Corp. engaged in “pervasive” infringement of an Alcatel-Lucent patent in the software maker’s development of its Outlook program, said a lawyer for France’s largest telecommunications equipment maker.

“It really is pervasive in Outlook, particularly in Calendar,” Alcatel-Lucent lawyer Luke Dauchot told a jury in federal court in San Diego in his closing argument today. He said the “Day patent,” as it was described during the trial, “provided an easy, fast, reliable way of using Outlook.”

Dauchot said the technology also was infringed in Microsoft’s Money and Personal PC applications. He told jurors Outlook wouldn’t have been as popular without the patent’s technology and that “Microsoft’s own survey showed that Outlook is the most frequently used Microsoft Office application by consumers.”

Microsoft attorney Juanita Brooks told jurors that Alcatel- Lucent is trying to win money for a patent that is of little significance to Microsoft because the company’s patent portfolio was not making enough money.

“They’re trying to get tens of millions of dollars for a feature that is one of tens of thousands in Outlook,” she said.

A different jury in San Diego federal court in 2008 found that Microsoft had infringed the patent and awarded $358 million in damages. While upholding the verdict, an appeals court overturned the damages award, finding the calculation lacked sufficient evidentiary support, and sent it back for retrial.

Microsoft, the world’s biggest software maker, had argued on appeal that the damages were too high because the invention is one of many features within a product.

Touch-Screen Form

The patent involves a touch-screen form entry that Redmond, Washington-based Microsoft argued is simply a “date-picker” function that isn’t utilized with e-mail, the most popular function of the Outlook program. Paris-based Alcatel-Lucent described the technology as a pop-up tool for form-filing that “plays a central role in the entire operation” of Outlook.

In the current trial, a witness for Alcatel-Lucent, Raymond Sims of Charles River Associates in Chicago, said a royalty payment of $65 million to $75 million “would be a reasonable and fair assessment.”

Robert Mnookin, a professor at Harvard Law School, testified as an expert for Microsoft and told jurors that “a reasonable royalty would be a figure below $5 million.” He said “it would have served Lucent’s interests enormously to have reached an agreement for less than $5 million” to settle the infringement.

The case is Lucent Technologies Inc. v Gateway Inc., 07-cv- 2000 U.S. District Court, Southern District of California (San Diego).

--With assistance from Susan Decker in Washington. Editors: Peter Blumberg, Mary Romano

To contact the reporter on this story: Bill Callahan in San Diego at callahan@san.rr.com.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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