Alcatel-Lucent has begun court proceedings for its lawsuit against Microsoft, complaining that Microsoft’s Xbox game systems violates one of the company’s 1993 patents “relating to the code for generating video frames.”

The partnership says it plans to demand $1.50 USD for “every alleged misuse of the patent” but it is not clear what is considered a misuse. At worst, the suit could apply to all Xboxs and Xbox 360s ever sold.

Microsoft has so far disputed the claims and also says “that four fifths of the claim applies to video frames in Windows Media Player, which is available as a separate, free download and so wouldn’t generate royalties for Alcatel-Lucent.”

Alcatel-Lucent began its set of lawsuits in 2002 but had them split up and separated by technologies. In 2003, the company won a $1.5 billion USD verdict from MP3 audio patents but the verdict was overturned this year. Earlier this month however, the company won $368 million USD from Microsoft over patents relating to touchscreen technology.

In response to the suits, Microsoft has filed a countersuit accusing Alcatel-Lucent “of violating nine patents relating to interfaces and messages on both computers and fax machines.”

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After having exited the travel business once before by spinning off Expedia, the Redmond company appears to stepping back in by scooping up a Washington-based startup.

Farecast is not exactly like Expedia, or other travel sites for that matter. Instead it essentially provides forecasts of whether fares would rise or fall on a specific route. From there, it provides a recommendation of whether to buy the ticket now or wait.

Microsoft had already been working with the site, having signed a partnership last summer to provide its fare forecasting data on MSN Travel. Although neither side is disclosing how much the deal was worth, it is estimated to be in the neighborhood of $115 million.”We’re excited to confirm that Farecast has been acquired by Microsoft,” CEO Hugh Crean said. “This acquisition creates tremendous opportunities for the Farecast team and our customers.” He said more details would be provided in the coming weeks.

A spokesperson for Microsoft also confirmed the merger. The Seattle Post-Intelligencer also reported that the company had received multiple offers, and that the deal brought a five-fold return to its investors.

Expedia was spun off in 2001 to stave off antitrust concerns, among other reasons. Although the company did link into the travel site’s catalog for quite a few years, and still does rather prominently through its MSN Travel site, that partnership has faded away somewhat.

It is not immediately clear how the Farecast buy would change MSN’s travel services, if at all.

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Hackers continue trying to exploit a patched vulnerability in Microsoft’s Graphic Display Interface (GDI), researchers said this week.

Craig Schmugar, threat researcher at McAfee, reported that the first exploit was discovered on Friday, three days after the issue was patched by bulletin MS08-021.
“One method the bad guys use is to take the patch and reverse engineer it,” Schmugar said on Tuesday. “They look at the files on the computer prior to installing the patch and then after, and try to compare the two and see how they can take advantage of the change.”

The exploit – which can permit remote code execution if a user opens a specially crafted EMF or WMF image file – does not affect customers who have installed the updates detailed in MS08-021, said Bill Sisk, security response communications manager for Microsoft.

“By default, Microsoft Windows XP, Windows Vista, Windows Server 2003, and Windows Server 2008 customers will have this update applied automatically through Automatic Updates,” Sisk said.

Microsoft encourages all customers to apply its most recent security updates to help ensure that their computers are protected from attempted criminal attacks.

Schmugar said that GDI has had vulnerability issues in the past. The fact that Microsoft credited three researchers with discovering the flaw suggests that multiple people were looking for potential problems and more problems could be on the way.

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The layout of the new Live Search News is somewhat similar to Google News, but also may remind some of Techmeme, another aggregator. Sections are listed across the top, with news headlines listed down the left column. Users are able to drill down from the major headlines by clicking “more on this story,” which returns news articles having to do with the topic of the headline article.

While Live Search News may never be able to break into Google’s dominance in the news aggregator segment, having another player in the space will benefit publishers.

Anecdotal evidence suggests that these services may actually do a better job of driving traffic to news sites than the front pages of these sources themselves. While in some cases these companies have taken issue with their content being indexed, for the most part they have been well received.

Exact details on Microsoft’s future plans for Live Search News are not yet known, as no official announcement of the service had been made as of midday Wednesday.

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Last year at a conference in Los Angeles, Microsoft introduced spectators to its new efforts to reach emerging markets and build innovative new form factors…to somewhat mixed results. This morning, there was a mix-up of another kind.

At last year’s WinHEC conference in Los Angeles, the opening session featured Microsoft Chairman Bill Gates’ proclamation that the telephone and the PC were merging, followed soon thereafter by a demonstration from Chief Research Officer Craig Mundie. It was obvious to everyone that what Mundie’s team produced for him couldn’t keep up with Gates’ presentation of Unified Communications, especially when Mundie found himself extolling the virtues of a piece of assemble-it-yourself furniture that had been converted into a device to remind seniors to take their medication.

It’s almost a year later, but it may just take that long these days for heads to roll. The two men in charge of the Unlimited Potential Group, whose task it was to develop new form factors and investigate unexplored business models for Microsoft, find themselves repositioned this morning, with former UPG head Will Poole having decided to retire from Microsoft this fall, BetaNews confirmed with Microsoft this morning.While it was never really clear that Poole was in charge of any specific projects, he was Corporate Vice President of UPG, and was often the man chosen to represent some of its projects to the press. For a time, Microsoft Surface was one of its best-known projects, and Poole was also associated with an infrequent Microsoft PC form factor innovation contest whose finalists last year included one that doubles as a portable shish-ka-bob grille (picture available here). For the next half-year or so, Poole will still be reporting to Mundie, though in a position described as “driving cross-group strategic initiatives.”

Poole was moved into UPG in March 2006, originally to head an emerging markets group which had the ominous task of grafting a purpose onto its fledgling UMPC form factor. Earlier, he had been in charge of the Windows Client Division, at a time when the company’s Trusted Platform project — at one time code-named Palladium — was transferred out of his purview and re-assigned to the Security Business Unit. Just yesterday, one of the architects of Microsoft’s Trusted Platform strategy publicly lamented his company’s diversion from its original course, and advocated a return to the Trusted Platform.

It seems Will Poole couldn’t catch a break.

Moving out of UPG along with Poole is Orlando Ayala, though based on Microsoft’s comments today, it appears he will be staying with the company. Ayala will report to Chief Operating Officer Kevin Turner, though the wording of a Microsoft statement today makes it appear as though Ayala had been reporting to Turner anyway, even though he was officially part of UPG.

Taking Poole’s place at UPG is Anoop Gupta, whose most recent project at Microsoft has met with some success: Unified Communications, the company’s strategy to move telephony onto the PC platform where the software industry can have a stake. Gupta is a veteran researcher and educator, having served over a decade at Stanford University as a computer science professor, and thereafter having served Bill Gates as his personal technology assistant.

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Microsoft moved swiftly in response to yesterday’s news that Yahoo is closing in on a deal with AOL. The software giant is reportedly joining forces with News. Corp. to submit a joint offer for Yahoo.

The News Corp.-Microsoft alliance was reported by the Wall Street Journal and the New York Times.

Under the agreement, News Corp. would throw in some cash to buy Yahoo, and the three companies (Microsoft, Yahoo and News Corp.) would presumably combine their online assets, which include MSN, Yahoo and MySpace. The Times says it’s a shift in strategy for News Corp. CEO Rupert Murdoch, who reportedly met with Yahoo CEO Jerry Yang early on and offered to help fend off Microsoft.

Under the terms of the Yahoo-AOL deal, Time Warner would pawn off AOL assets (excluding the dialup ISP) on Yahoo, put up a cash investment in the combined company, and take a 20 percent equity stake in it. Yahoo would use the Time Warner cash to buy back a few billion dollars in stock to drive the share price back up, thus potentially appeasing disgruntled investors.

It’s not really clear that the AOL agreement would do much to satisfy unhappy investors, though. Yahoo would still be plagued by the same operational problems that it had before the Microsoft takeover bid. And winning AOL, which may be valued at $10 billion under the arrangement, isn’t much of a prize.

“We think shareholders would prefer to cash out via a Microsoft offer — with or without News Corp. — rather than keep Yahoo in the hands of current Yahoo management with the addition of a troubled asset called AOL,” says Laura Martin, an analyst with Soleil-Media Metrics. “I think Yahoo management has lost its credibility in terms of execution and strategy — not just because of its operational weakness, but also because of how they have handled the Microsoft bid.”

The developments are unfolding just days after Microsoft CEO Steve Ballmer served Yahoo with an ultimatum: If a deal is not sealed in three weeks time (which implies a deadline of April 26), Microsoft will launch a proxy battle to take over Yahoo’s board.

Yahoo responded to the threat on Monday by suggesting the ball was in Microsoft’s court. “We continue to believe that your proposal is not in the best interests of Yahoo and our stockholders,” a letter from Jerry Yang and chairman Roy Bostock said. The letter also said the board wasn’t opposed to a deal with Microsoft, but not for $31 per share.

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Microsoft has released its first preview of Microsoft Robotics Developer Studio 2008, a re-named and re-designed version of its 2006 robotics studio software.

Microsoft Robotics Studio 06, according to the company, had over 200,000 copies downloaded and over 50 companies in the partner program. Today’s update was unveiled at the Robobusiness Conference and Exposition in Pittsburgh, the same conference that hosted the premiere of the earlier version.

This version promises better runtime performance, improved distributed computing capabilities with LINQ support, and some new tools. The virtual simulation environment (VSE), for example, received the ability to record and playback simulations and a new floorplan editor.The software is freely downloadable for noncommercial applications, and with its availability, Microsoft also announced a virtual robotics competition launching on April 21.

Robochamps (site requires Silverlight) will see Microsoft paired up with SimplySim in getting users of all skill levels to experiment using Robotics Developer Studio and simulate their results.

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Microsoft has released an integrated version of its Forefront enterprise security software into beta. The release, code-named “Stirling,” integrates with Microsoft Exchange Server, Sharepoint and Office Communications Systems, displaying its status on a single dashboard.

Microsoft has unveiled the public beta of its Forefront enterprise security product, known as “Stirling.”

This is a single product that delivers coordinated protection across desktop and server applications and the network edge. It comes with a single dashboard that shows all the systems protected by Stirling.

“Stirling covers the end points, Microsoft Exchange Server, Sharepoint and Office Communications Systems, which is Internet messaging, and the Threat Management Gateway,” Paul Bryan, Microsoft’s director of Forefront security products, told TechNewsWorld.

“Threat Management Gateway” is the name of the next version of Microsoft’s Internet Security & Acceleration (ISA) Server. This is scheduled for release next year, Bryan said.

Stirling also provides dynamic responses to emerging threats. Its technologies act as a distributed system and share information with each other so they can correlate security information to identify previously unknown or complex threats.

System administrators can configure Stirling’s protection technologies to dynamically respond to these threats.

If, for example, a previously unknown piece of malware infects a computer, the servers and desktops it connects to will check to see what it is doing and why, and will inform the network edge security part of Forefront, which will deal with the affected machine.

Stirling is integrated tightly with Active Directory, Windows 2008 Server, Windows Vista, Active Directory Federation Services (ADFS), Windows Rights Management Services (RMS), Network Access Protection (NAP), Windows CardSpace, Microsoft Forefront, Identity Lifecycle Manager, Microsoft Systems Center and Microsoft Office.

Tight integration at the back end means users “can quickly and easily set up your system for administration and set up policies,” Bryan said.

Protection against malware and spam as well as content filtering and firewall services are also integrated into Stirling.

Policy enforcement is simplified. If, for example, your policy forbids forwarding a particular document to unauthorized recipients but somebody forwards it anyway, the system will not let the unauthorized recipient read or open the document.

Integration with NAP lets administrators control network access by machine or by user.

Companies who use outside staff or contractors will find this helpful: When a contractor or consultant tries to hook into the enterprise’s network, the network “will check the device to ensure it meets the enterprise’s criteria and conforms to its policies before it allows it onto the network,” Bryan said.

Networks can be preconfigured to automatically upload patches or other applications the contractor’s device will need to meet the enterprise’s criteria.

Stirling has a single management console across client, server and network edge security. This will work with Microsoft System Center or other existing consoles in an enterprise, Bryan said.

“Customers are looking for ways to get overall visibility, lower total cost of ownership and lower complexity,” Bryan added. “We’re bringing together security in a unique way with a full set of offerings.”

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