A US appeals court on Friday threw out a damages award of 358 million dollars against Microsoft in a patent infringement case filed by French telecom firm Alcatel-Lucent.
The US Court of Appeals for the Federal Circuit upheld the ruling by a lower court that Microsoft infringed a patent involved with selecting the date in its Outlook program.
But it asked the lower court to recalculate the damages in the case.
"Because the damages award based on the infringing date-picker feature of Outlook is not supported by substantial evidence and is contrary to the clear weight of the evidence, the damages award must be vacated," the court said.
"The only reasonable conclusion supported by the evidence is that the infringing use of the date-picker tool in Outlook is but a very small component of a much larger software program," it said.
The Redmond, Washington-based Microsoft welcomed the ruling.
"We are pleased that the Court vacated the damages award, and we look forward to taking the next step in the judicial process," Microsoft spokesman Kevin Kutz said.
Alcatel-Lucent welcomed the infringement ruling but expressed disappointment the damages were overturned.
"We are very pleased with this decision by the US Court of Appeals for the Federal Circuit affirming the jury's decision that Microsoft infringed the Alcatel-Lucent Day patent," spokeswoman Mary Ward said.
"While we are disappointed that the Court did not affirm the jury's decision on damages, we look forward to an upcoming proceeding to determine the compensation to which Alcatel-Lucent is entitled based on the Court's finding that Microsoft did use our patented invention," she added.
The firm then known only as Lucent filed a 15-patent suit in 2003 against computer makers Dell and Gateway for allegedly selling machines with Microsoft software that used Lucent technology without permission.
Microsoft weighed into the case to protect its partnerships with computer makers and to stop the litigation from being broadened to other companies using Microsoft software.