Production of the Microsoft XBox 360 is in jeopardy as Lucent Technologies has filed a patent infringement lawsuit against the computer giant. Legal experts who have reviewed the case seem to agree that Microsoft will likely lose a court battle over the patent and will be best off settling out of court, which would likely cost them hundreds of millions of dollars.
Lucent knows how important the Xbox 360 console is to Microsoft's long-term business strategy, and they also know that a piece of their technology is in that system without their permission. That gives them a lot of leverage. The technology, which is essentially a built-in MPEG-2 decoder, is an integral part of the current system. Taking the technology out would make future versions of the console much less functional than the version that is being sold now.
This legal battle is setting up a lot like the recent RIM/Blackberry court case, which was settled for a very large sum. Patent lawyers and technology experts have concluded that Lucent's case against Microsoft is actually much stronger than the one against Blackberry.
I do not own stock in any of the companies in this article, but if I were an investor I would definately consider Lucent a strong buy for tomorrow and Microsoft a definate hold/sell.
PCWorld.com - Could a Patent Lawsuit Stop the Xbox 360?