Fraunhofer Gesellschaft

Microsoft Corp. does not have to pay $1.5 billion in damages to Alcatel-Lucent SA, a panel of federal appeals judges has ruled in what may be the last word on a long-running digital music patent lawsuit.

In February 2007, a jury in U.S. District Court in San Diego determined Microsoft infringed on two patents that cover the encoding and decoding of audio into the digital MP3 format, a popular way to convert music from CDs into files on computers and vice versa.