Microsoft has won an appeal to overturn a $US358 million award it had been ordered to pay to Alcatel-Lucent in the latest ruling on an ongoing patent-infringement dispute that began in 2003.

The United States Court of Appeals for the Federal Circuit upheld the ruling of a federal jury in San Diego that Microsoft infringed on the so-called "Day" patent at issue in the case. However, the court said there is not enough evidence to uphold the damages the lower court had awarded Alcatel-Lucent, according to its decision, which is posted on its Web site.

The court sent the calculation of damages back down to the trial court for further proceedings, according to its ruling. The "Day" patent concerns how technology is implemented in Microsoft's Outlook e-mail application.

"We are pleased that the court vacated the damages award, and we look forward to taking the next step in the judicial process," Microsoft spokesman Kevin Kutz said in an e-mailed statement.

Alcatel-Lucent did not respond immediately to request for comment on Friday.

Alcatel-Lucent and Microsoft had already settled most of the claims of a broad patent dispute that one point spanned six different suits and awarded Alcatel-Lucent $US1.5 billion in damages, a decision that was later reversed.

Originally, Alcatel-Lucent charged Microsoft, Dell and Gateway with patent infringement concerning technologies in Windows and other video playback products, such as Windows Media Player. Microsoft counter-sued Alcatel-Lucent the next year to invalidate the patents.