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Friday, February 23, 2007

Who Owns the Rights to MP3

MP3 LogoIt seems like it happens overnight doesn’t it? Google was suddenly the principal search engine. ZIP became the chief compression tool for downloads. JPG turned into the standard format for cameras and photo files. MP3 developed into the most popular format for storing and listening to music files.

So who owns the rights to the MP3 format? According to a jury in San Diego, Alcatel-Lucent(Bell Labs) holds the patent to MP3. They are so convinced they ordered Microsoft to pay $1.52 Billion in damages for including MP3 in Windows without paying royalties.  Yes, “Billion” isn’t a typo.

As you might guess, Microsoft disagrees with the jury and will seek relief and appeal if necessary.  My guess is they can hold this up in the courts until the patents expire. 

Microsoft thought they had full rights after paying the German based, Fraunhofer Institute $16 million to license MP3 technology. Apparently, the Fraunhofer Institute helped develop MP3 with Bell Labs but key patents were filed by Lucent.  According to MP3Licensing.com the format is owned by Fraunhofer Institute along with Coding Technologies, Agere and Thomson(RCA).  They have a list 453 other licensees who may be the next target of Alcatel-Lucent.

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