"We think this verdict is completely unsupported by the law or the facts. We will seek relief from the trial court, and if necessary appeal," said Microsoft Corporate Vice President and Deputy General Counsel, Tom Burt.

Though Alcatel-Lucent spokesperson Joan Campion said that the company "made strong arguments supporting our view, and we're pleased with the court's decision."

But according to Burt: "Like hundreds of other companies large and small, we believe that we properly licensed MP3 technology from its industry recognized licensor – Fraunhofer. The damages award seems particularly outrageous when you consider we paid Fraunhofer only $16 million to license this technology.

"We are concerned that this decision opens the door for Alcatel-Lucent to pursue action against hundreds of other companies who purchased the rights to use MP3 technology from Fraunhofer, the industry-recognized rightful licensor," he said.

This case is one of a number of patent disputes between Microsoft and Alcatel, including one over video-decoding technology in the Xbox 360.