Bloomberg News

Microsoft Must Pay Alcatel $70 Million in Damages, Jury Says

July 29, 2011

(Updates with lawyers’ comments in fourth paragraph.)

July 29 (Bloomberg) -- Microsoft Corp. must pay $70 million for infringing an Alcatel-Lucent patent used in versions of Microsoft’s Outlook program and two other applications, a federal jury in San Diego said today.

Alcatel-Lucent, France’s largest maker of telecommunications equipment, asked for as much as $75 million in damages. Microsoft’s lawyers asked jurors to limit the award to $5 million.

The technology, called the “Day patent,” was described in court during the as involving a touch-screen form entry. Microsoft argued it’s simply a “date-picker” function and isn’t used with e-mail, the most popular function on Outlook. Paris-based Alcatel-Lucent described the technology as a tool that “plays a central role in the entire operation” of Outlook.

“Alcatel-Lucent is obviously pleased with the verdict and the jury’s recognition in the value of the Day patent that Microsoft infringed,” Luke Dauchot, a lawyer for Alcatel-Lucent, said after the verdict.

A different jury in San Diego in 2008 found that Redmond, Washington-based Microsoft had infringed the patent and awarded $358 million in damages. An appeals court, upholding the infringement verdict, overturned the damages award, finding the calculation lacked sufficient evidentiary support. The case was sent back for retrial on damages only.

‘Genuine Apportionment’

“We continue to maintain that current law requires a genuine apportionment of damages when the infringement is directed to a small feature of a feature-rich product,” David Howard, Microsoft’s deputy general counsel, said in an e-mail today. “We are reviewing the verdict in that light and considering next steps.”

Dauchot told the jury in his closing argument the patent was “pervasive in the affected programs and helped provide “an easy, fast, reliable way of using Outlook.”

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.

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

--Editors: Andrew Dunn, Charles Carter

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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