Patent Penalty Against Microsoft Increased $25 million

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

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