In an appeal process that started with February 2007, a jury in U.S. District Court in San Diego determining Microsoft infringed on two patents that cover the encoding and decoding of audio into the digital MP3 format. Then the judge who presided over the case, Rudi M. Brewster, vacating the ruling, siding with M$ saying Microsoft's Windows Media Player software does not infringe on one of the two patents in question.
Then it went before a panel of federal Judges and the result is the same. M$ does not owe Alcatel Lucent 1.5 Billion.
You can read more at SFGATE.