As the federal jury's $1.52 billion patent infringement award goes against the Microsoft and its allies and in favor of Alcatel-Lucent for the two patents they hold, many questions remains unanswered.
It's difficult to say which companies will be affected by Thursday's award. MP3 users have traditionally been subject to two sets of rules for using the codec, one for encoding, and another for playback after decoding. If the two patents upheld by the jury today apply only to products that encode audio into MP3s, the ruling would affect only companies such as Microsoft, Apple, Yahoo and others offering software that lets consumers make their own MP3 files or MP3 encoding software.
If it covers playback too, every company involved even tangentially with MP3 stands to lose big. Microsoft's licensing bill for Thomson/Fraunhofer was only $16 million -- about 1 percent of what it now owes Alcatel-Lucent. A significant number of the companies who offer MP3 encoders and/or players could face a similar judgment, with many being driven out of business.
Although Thomson is widely accepted as the licensor of Fraunhofer's MP3 codec, Alcatel-Lucent holds two MP3-related patents upheld by a jury.
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