Lucent Technologies is suing Microsoft over alleged patent infringement in the Xbox 360, and has requested that all existing stock is pulled from the shelves. Lucent is seeking "heavy financial restitution".

The lawsuit, filed at the US District Court in San Diego, alleges that Microsoft deliberately infringed a Lucent patent on MPEG encoding known as Adaptive Coding and Decoding of Frames and Fields of Video.

Lucent filed legal cases in 2003 against Dell and Gateway over the infringement of several patents, including the MPEG patent.

But the company was forced to drop the cases after typographical errors were found in its original patent. The errors have been corrected and Lucent is now reopening the case.

"Since 25 October and continuing to the present, Microsoft has also contributed to and/or induced the infringement of at least one claim of the patent in suit," the legal filing reads.

"Although Lucent notified Microsoft of its infringement of the patent in suit, Microsoft continued its infringement after receiving the actual notice. Microsoft's infringement of the patent in suit was, and continued to be, willful."

If the suit is successful it could be a major problem for Microsoft, which is looking to capitalise on delays in the release of Sony's PlayStation 3 gaming console. Since the Xbox 360's launch in November, sales have been slow but steady.