The complex case where Microsoft (Nasdaq: MSFT) was ordered earlier this year to pay $1.5 billion in an Alcatel-Lucent (EPA:ALU) MP3 patent dispute, has been overturned, and U.S. District Judge Rudi Brewster in San Diego ruled that the damage award was not valid because it appears Microsoft never infringed one of the two patents—as Lucent-Alcatel claims, reports WSJ. Now, Judge Brewster must now hold a new trial to calculate the damages. Alcatel-Lucent plans to appeal.

Earlier this year in the ruling, Microsoft was found infringing on two Alcatel-Lucent patents involving MP3 audio code technology...it was accused of violating Alcatel-Lucent’s patents with Windows Media Player...the $1.52 billion judgment amount was based on worldwide sales of Microsoft’s Windows OS since 2003.

AP: Brewster’s decision seems to ease fears that Alcatel-Lucent would launch legal attacks against the hundreds of other companies that license technology from Fraunhofer, including Apple Inc. and RealNetworks Inc.

Meanwhile, NYT had a detailed story in March about MP3 patents and the complex dispute surrounding them. The confusion stems from the number of companies and institutions—including Thomson, Royal Philips Electronics and AT&T (through Bell Labs, now part of Alcatel-Lucent)—that worked to create the MP3 standard almost two decades ago.

• Microsoft Ordered to Pay $1.52 Billion To Alcatel-Lucent On MP3 Patent Case; Can Appeal
• Microsoft Did Not Violate MP3 Patent: Federal Judge