Judge overturns $1.5 bln ruling against Microsoft

By Daisuke Wakabayashi

SEATTLE (Reuters) - A U.S. judge on Monday threw out a record $1.5 billion verdict against Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz), ruling the world's largest software had not infringed on audio technology patents held by France's Alcatel-LucentALU.PA.

Microsoft said the reversal was a victory for other technology companies who could have been at risk to patent infringement charges if Alcatel won.

A federal jury in San Diego ruled in February that Microsoft had violated two patents related to MP3 audio files and handed Alcatel-Lucent the largest-ever damages award in a U.S. patent case.

MP3 is the standard digital music format, which allows audio to be compressed so that it can be easily played on computers, mobile phones or digital music players.

The court heard a post-trial motion on July 25 and 26 when Microsoft asked for the verdict to be reversed, a new trial or dramatic reduction in damages.

U.S. District Judge Rudi Brewster said in a 43-page order that the jury's damages could not stand because Microsoft had not violated one of the two patents.

The judge also called into question the second patent claim in the case, saying that Microsoft licensed the technology from German research organization Fraunhofer Gesellschaft, a co-owner of the patent.

"The Court finds that the jury's verdict of infringement was against the clear weight of evidence," Brewster wrote in his opinion.