Is Alcatel Suing over Xbox?

Microsoft Corp. (Nasdaq: MSFT) is doing something with video that Alcatel (NYSE: ALA; Paris: CGEP:PA) doesn't like, and that's resulted in two patent lawsuits that just might be pointed at Microsoft's Xbox 360 gaming console.

Alcatel filed the suits on Nov. 17 in a U.S. District Court in Texas.

And, in a sense, there's more to come. As Alcatel prepares to complete its merger with Lucent Technologies Inc. (NYSE: LU), it inherits another set of patent charges that date back to 2003, when Lucent and Microsoft sued each other.

Microsoft sees a connection. In a written statement, a Microsoft spokesman declined to comment on the new lawsuits but did make note of the filing date.

"Alcatel’s recent filing appears related to longstanding patent litigation between Lucent and Microsoft in U.S. District Court in San Diego, which Alcatel is inheriting as part of its merger with Lucent," the statement reads. "Alcatel filed its claims this past Friday – the same day that its merger with Lucent was approved by the U.S. government.” (See Bush Approves Alcatel Lucent and US to Watch Alcatel Lucent.)

Scott Partridge, a Baker Botts LLP attorney representing Alcatel, wouldn't comment on the timing of the suits. "All I will say to you is, that's a Microsoft statement, not ours," he told Light Reading. "That's their perspective."

In fact, there's another explanation for the timing. Earlier this month, Microsoft announced users of the Xbox 360 game platform would be able to rent movies and purchase TV episodes through the Xbox Live network. (See Microsoft to Sell VOD on XBox and Xbox.

Some of the patents involved seem like they'd be useful in that context, as they cover the ability to fast-forward and rewind an MPEG video stream properly. Others relate to authenticating users on a VLAN, a task that would be useful in determining who has the rights to download a video for rent.

Then again, the video aspect of the lawsuits could relate to video capabilities in Microsoft's Windows XP Media Center, or even to Microsoft TV's IPTV Edition -- although the latter seems unlikely given Microsoft's IPTV partnership status with Alcatel. (See Alcatel Preps New Tech Roadmap.)

Alcatel isn't talking. A spokesman only points to a company statement saying Alcatel has "engaged in intellectual property licensing discussions" with Microsoft and that it "hopes that the matter can be resolved by further discussions rather than by the courts."

Lucent did sue Microsoft in March 2006 over a patent supposedly violated by Microsoft's Xbox 360; Microsoft then countersued, claiming Lucent was infringing 10 other patents, according to a Microsoft SEC filing. A court date for this case hasn't been set.

But the "longstanding" patent tussle mentioned by Microsoft's spokesman is probably the one dating back to 2003. According to Microsoft's Securities and Exchange Commission (SEC) filings, Lucent was then making patent-infringement assertions against manufacturers of Windows-based computers; Microsoft fired back with a suit calling for declaratory judgment that no Lucent patents were violated. The court dates for these cases were set to begin on Nov. 20.

Alcatel's two new lawsuits cover seven patents, all of which were filed with the U.S. Patent Office before 2002. The patents were issued on dates ranging from 1997 to 2005.

The first Alcatel complaint involves two patents related to user authentication in a VLAN setting (patent numbers 6,339,830 and 6,874,090) and a third relating to network address translation between applications, using IP telephony as an example (6,661,799).

The second complaint, where the video stuff kicks in, involves four patents. Three of them, issued to Oracle Corp. (Nasdaq: ORCL) between 1997 and 2000, have to do with tagging a video stream, either for nonsequential playback or for accurate delivery of features such as fast-forwarding, rewinding, and video editing (6,112,226; 5,864,682; and 5,659,539).

An additional patent in the second complaint, issued to Alcatel in 2000, has to do with avoiding conflicts between VOIP application software and a personal computer's operating system (6,823,390).

— Craig Matsumoto, Senior Editor, Light Reading