Microsoft has avoided a $1.5bn (£740m) damages payment to French telecoms firm Alcatel-Lucent.

In February a jury concluded that Microsoft's Media Player infringed upon two of Alcatel's patents relating to the conversion of MP3 music files. Last night, a California Federal judge overturned the decision, sparing the company from a hefty damages fee.

Microsoft previously paid $16m (£7.9) to German firm Fraunhofer-Gesellschaft for the rights to use the disputed technology. Yesterday Judge Rudi Brewster ruled that Alcatel-Lucent did not hold outright ownership of the patent and dismissed February's charges.

'Today's ruling by the judge is a victory for consumers of digital music and a triumph for common sense in the patent system,' said Brad Smith, senior vice president of Microsoft's general counsel.

A spokeswoman for Alcatel-Lucent says the company will appeal the verdict.