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Patent Penalty Against Microsoft Increased $25 million

davemania   on 23 August 2006 - 16:48 · 12 comments & 5192 views

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Microsoft willfully infringed on the patents of a small Michigan company and engaged in litigation misconduct in its effort to defend itself, a federal judge ruled Friday.

U.S. District Judge Leonard Davis upped a jury's award against Microsoft by $25 million, plus nearly $2 million in legal costs. He cited several instances of misconduct and "ample circumstantial evidence" that Microsoft viewed the patent-holder, closely held z4 Technologies, as "a small and irrelevant company that was not worthy of Microsoft's time and attention, even if Microsoft was potentially infringing its patents."

The case centers on patents held by z4 founder and President David Colvin for "product activation" technology, designed to limit software piracy. z4 alleged Microsoft Office products infringed on its patents beginning in 2000; the alleged Windows operating system infringement began in 2001.

z4 sued in September 2004 and won a jury verdict of $115 million from Microsoft and $18 million from another defendant, Autodesk, the computer-aided design software maker. The judge added $322,000 in z4 legal costs to Autodesk's penalty.

In addition to granting z4's motions seeking enhanced damages Friday, Davis also rejected motions by the defendants for a new trial and other judgments.

"I'm very gratified that the process works," Colvin said Monday. "... It's certainly good news to me and really good news to all the small companies and independent inventors alike in this country."

News source: Seattle Times

Post a comment · Send to friend Comments · There are 12 additional comments
(1 reply) #1 MrA on 23 Aug 2006 - 16:58
Normally I'm against the whole 'suing a company after it's used your patent for years' kinda thing, but in this case, I say milk MS for all you can. Why? The patent in question is regarding 'product activation'. A most digusting piece of technology which should be removed from all software.

NOTE: I'm normally against this type of litigation (like the eolas patent), but in this case, the technology should be prevented from becoming wide-spread. If litigation help, then I'm all for it.
#1.1 John Ericson on 23 Aug 2006 - 18:20
Nice to now that you lack principles and integrity. Anything that suits you is fine? Gee, that's the kind of a law system I want!
(1 reply) #2 billyea on 23 Aug 2006 - 16:59
Ouch, first Apple bashes Microsoft, then Apple gets in NASDAQ trouble, then Microsoft gets sued
Karma SUCKS!
#2.1 Colin-uk on 23 Aug 2006 - 18:00
Then apple gets sued by its own shareholders

http://www.neowin.net/index.php?act=view&id=34692

indeed it does.
(2 replies) #3 JiveMasterT on 23 Aug 2006 - 17:15
Hey z4... welcome to 2001. Suing a company after they've used some technology for 5 years is a dick thing to do.

I think that before any of these sorts of patents can be enforced, the company that is suing should have to provide evidence that they had at least a proof of concept software before the other company released it into production.
#3.1 demonx on 23 Aug 2006 - 17:35
This is what got Microsoft in trouble

"U.S. District Judge Leonard Davis upped a jury's award against Microsoft by $25 million, plus nearly $2 million in legal costs. He cited several instances of misconduct and "ample circumstantial evidence" that Microsoft viewed the patent-holder, closely held z4 Technologies, as "a small and irrelevant company that was not worthy of Microsoft's time and attention, even if Microsoft was potentially infringing its patents."

If you are going to use someone elses patent and then ignore them when they ask you what's going on, then you are generally going to get yourself in trouble no matter how many billions you have in the bank.
#3.2 markjensen on 23 Aug 2006 - 18:07
These sorts of time-delays are common, I am afraid.

Unisys acquired rights to LZH compression used in GIF files, and suddenly demanded licensing royalties and payments (with the "or else" of litigation hanging in their demands).
Microsoft has also done the same with their FAT patents, suddenly creating a licensing system to collect royalties. And, for those who infringe without payment.... Lawsuit time.

It seems that it doesn't really matter how long one lets their patent get freely used by others. They can turn it into a litigation money-maker at any time, and Microsoft is as guilty as these other guys.
#4 simsie on 23 Aug 2006 - 17:19
They could also go after symantec who use the same sort of system, as i am sure many other companies do
#5 Dwarden on 23 Aug 2006 - 17:54
they sued after 4 erm 3 years ... and You don't know when they discovered when theirs tech was abused too ..
#6 neufuse on 23 Aug 2006 - 18:29
guess they should sue Adobe also
(1 reply) #7 mrmckeb on 24 Aug 2006 - 06:56
Did Microsoft 'actually' know that this copmany held a patent for this technology? It seems to me that you can think of anything these days and there is sure to be a patent holder out their waiting to sue you.

I think that patents should be more limited. Instead of a patent saying "Sends off information about the user and machine and recieves auth code" it should be more like "sends off 'a', 'b' and 'c' to the server in 'd' way. The server then does 'e' and returns the code as an 'f' to the client software" - detail is where it's all at. You should not be sued for patent violation unless your product is ~95% the same.
#7.1 markjensen on 24 Aug 2006 - 11:24
Did they know???

Did you read the posting?
Quote -
Microsoft viewed the patent-holder, closely held z4 Technologies, as "a small and irrelevant company that was not worthy of Microsoft's time and attention, even if Microsoft was potentially infringing its patents."
They had reason to believe, but dismissed them as a small company they could crush.

Kinda like the big bully at school who takes other kids' milk money.

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