Alcatel-Lucent (A-L) decided to sue Microsoft because of how it has used the MP3 format with Windows and its Media Player. The case has now come to an end with Microsoft as the loser and it has to pay $1.52 billion. Microsoft has paid the fee that the Fraunhofer Institute wants for the the collection of MP3 patents it holds, but according to A-L these two patents aren’t covered by the fee paid to Fraunhofer Institute. Microsoft thinks that one of the patents is irrelevant in this case and that the other is actually included in the already paid fee, which it’s actually not.
The two patents covers how music is converted to MP3, where one analyze the sound and determine what is music and what is background and the other investigate what is actually audible for the human hearing.
The decision means that up to 400 companies that has licensed the MP3 technology from Fraunhofer, or via its American representations Thomson Technologies, may also have to pay license fees to A-L as well. The two patents are apparently not a part of the (first) license.
Microsoft has appealed and the process will probably go on for over a year from now, meaning it will take some time before we have a final decision.