A record $1.5 billion (€1.08 billion) verdict against Microsoft that ruled it had infringed on audio technology patents held by a French company has been thrown out by a US court.
Microsoft said the reversal was a victory for other technology companies who could have been at risk to patent infringement charges if French company Alcatel-Lucent had 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 US patent case.
The court heard a post-trial motion on July 25th and 26th when Microsoft asked for the verdict to be reversed, a new trial or dramatic reduction in damages.
US District Judge Rudi Brewster said 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 a German research organisation that was a co-owner of the patent.
Alcatel-Lucent spokeswoman Mary Ward said the reversal was "shocking and disturbing" and that the company planned to appeal the latest decision.
But Microsoft said there will no new trial unless the French networking company appeals the decision to the US Federal Circuit Court and succeeds in overturning the San Diego court's ruling.
Even if that is the case, damages from the original ruling will not be reinstated, Microsoft said.