MP3 suit could affect hundreds of firms

SAN DIEGO -- Alcatel-Lucent told a jury it is owed almost $2 billion for Microsoft Corp.'s use of the standard technology for playing music and audio files on a computer, a dispute that may affect hundreds of companies that rely on MP3.

Microsoft, the world's biggest software maker, countered in federal court in San Diego that Alcatel-Lucent is trying to hold up every company that uses the MP3 standard and is demanding royalties that are already paid to another company.

Alcatel-Lucent is targeting Microsoft's Windows Media Player, including the version used in Microsoft's Vista operating system going on sale today . A three-week jury trial in the patent-infringement fight started yesterday .

Microsoft "just took what they wanted, they didn't care about the rules and they sold millions and millions of copies," John Desmarais, Alcatel-Lucent's lawyer, told the jury in opening statements.

A win for Paris-based Alcatel-Lucent might clear the way for legal actions against hundreds of companies relying on MPEG-1 Audio Layer 3 technology, commonly called MP3, according to Microsoft.

"We wanted our day in court, not only for us, not only for our customers, but for MP3," Microsoft lawyer John Gartman told the jury.

Microsoft, based in Redmond, Wash. , says it uses a different technology from that covered by one patent and that the second relates to innovations used with the owner's permission. It also claims Lucent's patents are invalid.

Microsoft licenses a patent from German researcher Fraunhofer Institute for Integrated Circuits IIS through Thomson SA, a French provider of satellite decoders and post-production services for movies. Fraunhofer helped develop the patented MP3 audio-compression technology with Bell Labs, a predecessor company to Lucent Technologies Inc., which Alcatel SA acquired last year.

US District Judge Rudi Brewster and lawyers for the two sides yesterday selected a nine-member jury to hear the case. Testimony and final arguments are set to last three weeks.

Among hundreds of licensees of Fraunhofer's innovations are Microsoft rival Apple Inc., computer makers Hewlett-Packard Co. and Toshiba Corp., chip maker Intel Corp., electronics maker Bang & Olufsen, media-playing software maker RealNetworks Inc., and the Internet search engine Yahoo Inc.