Microsoft Infringed Patents – In The Name Of Anti-Piracy!

Some court rulings are just rich with irony. On 8 April, a jury found that Microsoft infringed on Uniloc patents for product activation. Microsoft uses the technology to protect its software from theft. Who’s stealing from whom?

I expect to read lots of comments praising today’s jury verdict, which ordered Microsoft to pay Uniloc $388 million. Gauging from comments on past posts about product activation, many of you don’t much like it.

The case could be an episode of some TV legal drama. Uniloc filed the patent dispute in late Sept. 2003. About three years later, US District Judge William Smith issued summary judgment for Microsoft, which Uniloc appealed. In August 2008, the US Court of Appeals for the Federal Circuit sent the case back to trial, overruling the judge.

How’s this for drama? According to court documents:

The district judge indicated that he was inclined to appoint an independent expert or special master to assist in deciding the motions given the complicated subject matter of this dispute. Ultimately, the district court hired an evening law student who was finishing his PhD in computer science as an unpaid judicial intern to work on the case. Uniloc objected to the intern’s involvement with the case, alleging that the intern had numerous ties to Microsoft.

What drama! The so-called expert advising for the court had ties to Microsoft. The lower court essentially dismissed the case in Microsoft’s favour, claiming that for infringement there must be identical algorithms used on client and server systems, which Uniloc failed to prove. The appellate court disagreed, in part because of statements made by Microsoft and Uniloc’s narrower scope of infringement. But the appellate court didn’t remove Judge Smith, as Uniloc had requested.

In dispute: U.S. Patent No. 5,490,216. The appeals court ruling explains:

The ‘216 patent is directed to a software registration system wherein a particular piece of software may run on a platform in use mode if and only if a specified licensing procedure has taken place … Uniloc sued Microsoft, alleging that Microsoft’s Product Activation system, an anti-piracy registration system used to reduce unlicensed use of its software products, infringed sixteen claims of the ‘216 patent under eight different infringement theories over twenty-four different disputed claim terms.

Today’s jury verdict is bigger trouble for Microsoft than might initially appear, because the award covers product activation outside the United States—$194 million of the award (MarketWatch reported the $194 million figure, based on court documents, which I haven’t yet seen). The Patent Act, or Title 35 of the United States Code, governs US patents and generally protects US companies from international infringement. Uniloc has offices in California and Singapore.