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Alcatel Is French for 'Jackpot!'

Oh la la! Quel coup! It's champagne and caviar all around for struggling French equipment maker Alcatel-Lucent. Last week, a federal jury in sunny San Diego (where we'll be attending Microsoft's Convergence show in March, we note as we watch the snow fall outside) ruled that Microsoft had violated patents on MP3 technology held by the French firm. The ruling? Microsoft owes Alcatel-Lucent $1.5 billion dollars

Granted, that's a lot less than the $4.5 billion Alcatel-Lucent wanted, but still, for Redmond, that's got to sting. In fact, it could be the biggest patent infringement ruling...ever. So much for Microsoft's legal team getting the company out of jam after jam with relatively minimal damage. This is, of course, all pending appeal and lots of other legal wrangling already underway, and, oddly enough, Alcatel-Lucent might have sued itself right out of some potentially profitable partnering opportunities with Microsoft.

Still, for Alcatel-Lucent, the ruling could be a nice little shot in the arm for a company that's had some hard times lately . (And trust us, any company that's laying people off in France en masse is in some pretty serious trouble. Big layoffs are not easy to pull off over there.) It's also, as about a billion reporters have already written, potentially an invitation for Alcatel-Lucent to sue -- or, at least, bully into paying exorbitant license fees -- anybody and everybody involved with MP3 technology, including the ultimate merchant of music-player cool, Apple. Jackpot!

The details of the patent dispute are full of twists and turns (for a good summary, check out this article), but the point, as we've told you in this space before, everybody has to be vigilant about patents. This means you, if you develop just about anything. Seriously. Do your due diligence, get a good patent lawyer on retainer, read the news (we love this topic in RCPU, actually), talk to experts -- do whatever it takes to avoid a patent dispute. They can be expensive, nasty and very hard-fought. Quel horreur! Just ask Research in Motion or Microsoft...or maybe Apple in a few months.

What do you think of the proliferation of huge patent lawsuits in the technology industry? Do you worry about patent lawsuits yourself? Tell me at lpender@rcpmag.com.

Coming Thursday, reader e-mails on Vista and bunches of other stuff. And coming in March -- hang on, you're not ready for this -- RCPU
four times a week. Oh, yes.

Posted by Lee Pender on 02/27/2007 at 1:20 PM


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