8:00 AM Microsoft must pay $1.52 billion to Alcatel-Lucent.
According to a court ruling, software company Microsoft Corp. (MSFT: chart) is obliged to pay $1.52 billion in damages to telecommunications equipment maker Alcatel-Lucent SA (ALU: chart) for violating two patents which govern the conversion of audio into the digital MP3 file format on personal computers.

Back in 2003, Lucent Technologies filed 15 patent claims against Gateway Inc. and Dell Inc. for technology developed by its research arm Bell Labs, its research arm. In April the same year, Microsoft joined the group of defendants, claiming that the patents were closely tied to its Windows operating system.

Microsoft disputed that Alcatel-Lucent''s patents govern its MP3 encoding and decoding tools. It also said it licenses the MP3 software used by its Windows Media Player from a German company called Fraunhofer-Gesellschaft. Microsoft’s management think that the verdict is unsupported by the laws, as the MP3 technology is properly licensed from Fraunhofer for only $16 million. Microsoft said the court threw out Alcatel-Lucent''s claims that it willfully violated the patents, which would have led to three times higher damages.

Microsoft plans to appeal the jury''s decision. Its case is likely to have broader implications for the hundreds of companies using license MP3 technology from Fraunhofer. Shares of Microsoft slipped 0.5% in pre-market trading, while Alcatel-Lucent''s stock added 0.8%.


7:30AM NY-6:30PM Mumbai Sensex finishes with a heavy loss, Grasim tumbles.
The Sensex on BSE ended 388.78 points, or 2.77%, lower at 13,632.53. The market-breadth was very weak as there were more than five decliners for every advancer. As 2,211 stocks declined, only 404 advanced and 38 remained unchanged. Of the 30 stocks in the Sensex, only one advanced, while the other 29 declined. The turnover on BSE was Rs 4,563.10 crore, higher than Rs 4,243.02 crore on Thursday. On NSE, the turnover was Rs 10,337.47 crore, lower than Rs 11,717.01 crore on Thursday.

Economic and corporate news

Tight money supply and tax reductions put soaring prices under control to some extent, with wholesale inflation declining to 6.63% during the week ended February 10 from a record level of 6.73% the previous week. Lower prices of food products, including vegetables, egg, mutton, poultry chicken, condiments, spices, fish-inland, sooji, gur, atta, sugar and some manufactured products led the drop in inflation. It is still above the RBI prediction of 5%-5.5%.

US retail company Wal-Mart Stores and Indian Bharti Enterprises are very close to finalizing a deal for a retail joint venture, Bharti announced on Friday. Wal-Mart announced on Thursday it was also in talks to partner Bharti on supply chain logistics and providing technology support.

Arcelor Mittal, the world largest steel company, said today that it has signed various Agreements with the State of Senegal in West Africa to develop iron ore mining in the Faleme region of South East Senegal, a project that may involve an investment of approximately $ 2.2 billion.

Trading highlights

Debutant Power Finance Corporation was listed today at Rs 104 as against its issue price of Rs 85. Despite the negative sentiment on the market, the stock ended with a gain of 31% (Rs 26.55) at Rs 111.55.

Power Finance Corporation was also the most active stock with a turnover of Rs 450.80 crore followed by Reliance Industries and Tata Steel.

Advancers

Tata Steel was the only advancer in the Sensex stocks, up 0.7% to Rs 459.2. It had struck a high of Rs 466.85, and was firm throughout the day. Reportedly, Corus, newly-acquired by Tata Steel company, had raised hot/cold rolled prices for European markets by 5% - 7% for the second quarter 2007 deliveries, which supported Tata Steel shares.

Decliners

Grasim led the decliners today. The stock lost almost 6% to Rs 2,271.1. Telecom services provider Bharti Airtel was another prominent decliner, down 5.7% to Rs 756.1. ITC was down 4.6% to Rs 166.1 and Reliance Communications, off 4% to Rs 432.4. Private bank ICICI Bank slumped 4.3% to Rs 907.9, as a surprise hike in CRR announced recently continues to weigh on the stock.

Maruti Udyog declined 1.50% to Rs 866. The government on Thursday invited potential buyers from public sector financial institutions, banks and mutual funds for selling its remaining 10.3% stake in the company. Index heavy Reliance Industries finished almost flat, down 0.1% to Rs 1,412.80. The company board meets on February 24 2007 to review plans for raising $2 billion.