A federal appeals court Friday affirmed a jury verdict that Microsoft Corp.'s Outlook software and two other products infringed an Alcatel-Lucent patent, but ruled that a $358-million damages award against the software giant wasn't supported by evidence and needed to be re-calculated.
The case centered largely on Alcatel-Lucent's claim that Microsoft Outlook's calendar function infringed one of its patents.
Microsoft argued that the patent was invalid and wasn't infringed, but it also attacked the jury's damages award as far too high.
The company said the $358-million award was based on the full market value of Outlook, even though there was no evidence that Alcatel-Lucent's patented technology contributed to that value.
Microsoft argued that it should have to pay only $6.5 million.
Alcatel-Lucent said in court papers that the jury award was "undeniably large," but argued that the amount "simply reflects a reasonable royalty for Microsoft's unauthorized exploitation of Lucent's invention in over 110 million units of infringing software."
The jury award, handed down in April 2008, had grown to more than $500 million with interest.
The U.S. Court of Appeals for the Federal Circuit ruled Friday that a jury was within its rights to find Microsoft liable for infringement, but the court said the size of the monetary judgment against Microsoft was unreasonable.
While the appeals court did not embrace all of Microsoft's arguments, it said the Outlook feature that infringed the Lucent patent - a date-picker in the calendar function - was "but a tiny feature of one part of a much larger software program."
The Federal Circuit said the "only reasonable conclusion" one could draw from the evidence is that the portion of Microsoft Outlook's profit attributable to the Lucent patent "is exceedingly small."
The court sent the case back for a new trial on damages.
Other Microsoft products involved in the case were Microsoft Money and Windows Mobile.
Microsoft spokesman Kevin Kutz said the company was "pleased that the court vacated the damages award, and we look forward to taking the next step in the judicial process."
Alcatel-Lucent spokeswoman Mary Ward said her company was pleased the court affirmed that its patent was valid and that Microsoft infringed it.
Ward said the company was disappointed that the court threw out the damages award but "we look forward to an upcoming proceeding to determine the compensation to which Alcatel-Lucent is entitled based on the court's finding that Microsoft did use our patented invention."
The case had been closely watched in the business community, with several big-name corporations weighing in on both sides of the dispute.
Apple Inc., Intel Corp. and Oracle Corp. were among those who filed court briefs in support of Microsoft.
Here is a little background on Date picker
The Prof-UIS date picker control looks like and has the same features as the mini-calendar (the Date Navigator) in Microsoft Outlook (see Figure 1). It can be used in dialogs (see Figure 2) and other windows.
Figure 1. Microsoft Outlook-like style
Figure 2. Date picker control on a dialog
source: wsj & professional ui solutions
