Chalk this round up to Microsoft. Yesterday, an appeals court ruled that Microsoft didn’t have to pay $1.5 billion for patent infringement after all. The court case revolved around Alcatel-Lucent’s contention that Microsoft infringed on Alcatel-Lucent MP3 digital audio patents for converting music from CDs into files for use on mobile devices and computers.

Early last year, a San Diego jury ruled that Microsoft was guilty of infringing on two patents and awarded Alcatel-Lucent $1.52 billion, a record patent damage award. But in August 2007, U.S. District Court Judge Rudi Brewster threw the jury’s verdict out, saying the one patent was not infringed and the other was co-owned by German research institute Fraunhofer Institute, which had licensed the technology to Microsoft.

This case is only a slice of a broader intellectual property dispute between the two companies. When litigation began, 15 patents were identified as in dispute. Two claims were dismissed leaving the remaining cases up for trial.

A spokesman for Alcatel-Lucent said the company is reviewing its options.