Lucent is sueing Microsoft for patent infringement of United States Patent: 5,227,878. They claim that the XBOX 360's out of the box mpeg-2 decoding infringes their patent.
(sorry for the minimal detail but I didn't have much time to type this before work)
The patent in question can be found here:
Patent 5,227,878
Article 1
Article 2
It seems their more prepared this time...