The dubious $1.52 billion judgment delivered against Microsoft for infringing on Alcatel-Lucent's MP3 patents back in February was set aside by a federal judge. In a 43-page judgment that would probably take longer to read than The Deathly Hallows, Judge Rudi Brewster said that "the jury's verdict of infringement was against the clear weight of evidence," as Microsoft didn't infringe on one of the two patents in question, while ownership of the other one is "questionable."The situation is sticky because Microsoft paid the consortium that helped to develop the format, headed by the Fraunhofer Institute, to license the tech. However, Lucent claims the patents in question were developed before Bell Labs (Lucent's antecedent) joined the group to develop MP3. The overturned verdict also flash-freezes for the time being Alcatel-Lucent chances of going after other companies who picked up their license from Fraunhofer—Apple, Creative, Sony, etc.
On a less convoluted note, the $1.5 billion this frees up for Microsoft should nicely cover the billion or so they're dropping on the 360's extended warranty. See, it all works out in the end. [NYT]