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Microsoft May Get to Pay Less for Patent Violation

(CN) - Microsoft must either face a new trial or pay $26.3 million to a company that a jury found deserved $70 million for patent infringement, a federal judge ruled.

"This case illustrates the difficulty of properly valuing a small patented component, without a stand-alone market, within a larger program," U.S. District Judge Marilyn Huff wrote.

Alcatel-Lucent, France's largest telecommunications equipment-maker, had claimed that a day calendar function of Microsoft's Outlook email program infringed on its day patent, a touch-screen method of data entry.

A federal jury in San Diego agreed in late July 2011, leading Microsoft to move for a new trial.

"Significantly, Microsoft argues that 'Lucent presented no evidence, much less substantial evidence, that could have led a reasonable jury to conclude that Microsoft would have lost $67 in revenue for any fraction of the 109 million licenses to Office if Outlook did not include the date-picker,'" Huff wrote.

The jury's award was excessive, according to the court, though internal Microsoft memos revealed that Outlook, for which Microsoft sold 109.3 million licenses during the damages period, was the most popular component of Office suite.

"No reasonable jury could conclude that Outlook within Office is worth $67, leaving the value of Word, Excel, and PowerPoint combined to be only $31," she ruled. "As a result, the court concludes that the jury's verdict is not supported by substantial evidence, and /therefore, damages are excessive. The court concludes that, when Outlook is sold as part of Office, the highest amount of revenue attributable to Outlook that is supported by substantial evidence is $24.55."

"The court determines that a lump-sum reasonable royalty of $26.3 million is the highest damages award that is supported by substantial evidence, and that this award reflects a proper apportionment as required by law," Huff added.

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