Microsoft's Data Base Patent Invalidated in Suit with Veritas

As predicted in my earlier post on this case, Judge Coughenhour accepted findings by the special master and invalidated Microsoft's U.S Patent No. 5,558,147. The case is not over by any means. Microsoft is positioned quite well for the upcoming May 2008 trial with total damages on the contract claims capped at $4,000,000. Microsoft finds that kind of money in the cushions of its executive lounge couch. More coverage on this order is available from IP360 if you have a subscription.
VeritasMSJ147.pdf

Summary Judgment Granted For Microsoft on Patent Claims brought by Veritas

Judge Coughenhour adopted findings by the special master and granted Microsoft's motion for partial summary judgment on Veritas' claim for infringement of US Patent No. 5,469,573. Here is a summary of the decision from Jurisnotes and a link to the order's text:

Veritas sued Microsoft for patent infringement and related claims; the court adopted the report of the special master recommending that the court grant Microsoft's motion for summary judgment on Veritas's claim of infringement of the '573 patent. The '573 patent claims a data backup procedure and apparatus for backing up and restoring a fully configured operating system to the high capacity storage device of a computer workstation from standard system backup media without the need to reload and reconfigure the operating system from its original distribution media. Veritas alleges that certain operating system software sold by Microsoft have built-in backup and restore capabilities that can be used to infringe the '573 patent. Microsoft asserts that Veritas has not shown that any specific customer has used the accused software in a way that practices each step of any claim. Because the accused products had undisputed substantial non-infringing uses, Veritas could not show that use of the accused products necessarily infringed. As a result, Veritas had to point to a specific instance of direct infringement in order to avoid summary judgment on its charge of indirect infringement. Veritas had to show that deployment or restoration by a customer was accomplished using a method recited in the claims. The court noted that some of the claimed method steps were inherently ordered and indicated that Veritas had to prove that Microsoft's customers performed those steps in the order set forth in the claims. Veritas's evidence of direct infringement fell into three categories: 1) user manuals and other documents that instructed Microsoft customers on how to use the accused products; 2) testimony by Microsoft witnesses concerning use of the accused products; and 3) emails and other documents concerning use of the accused products.
It was clear that Veritas's reliance on various user manuals and related documents to show that a user actually performed the claimed method was too speculative to raise a genuine issue of material fact in that regard. The court noted that certain of these documents disclosed deployment scenarios that a customer could utilize without infringing the asserted claims. Moreover, Veritas's expert had to cobble together various parts of each document to show that they taught the claimed methods. But these parts were not disclosed together or in the claimed order. Nothing in the evidence indicated that Microsoft's customers had actually used the accused products in the manner suggested by Veritas. In addition, some of the documents did not even point to a sufficiently specific method such that a reasonable jury could identify an infringing method, much less conclude that a Microsoft customer had actually used the accused products to perform a claimed method.

Veritas still has claims for breach of contract and alleged misuse of confidential information. Those claims are set for trial in may 2008, but Vertas' damages are capped at $4,000,000.

Reports by Special Master in Veritas v. Microsoft Patent Litigation May Narrow Issues for May 2008 Trial

Reports by special master Gale R. Peterson were recently unsealed by the Court in the aging dispute between Microsoft and Veritas Software (now owned by Symantec Corp.) concerning the parties' decade-old joint development of storage management software. The ill-fated business relationship between Microsoft and Veritas began in 1996, when they entered into a development and licensing agreement "whereby Veritas promised to provide Microsoft with the source code for its volume management technology, called Logical Disk Manager (LDM), to be embedded in the next version of the Windows NT operating system, Windows NT 5.0, later renamed Windows 2000." According to a recent order in the case "Veritas’ express objective in entering the Agreement with Microsoft was 'to build a Windows NT Add-on products business[.]'" In other words, "Veritas planned to develop and market to Windows customers certain volume management-related features, or increased capabilities, that were not included in the base LDM to be embedded in Windows 2000."

Well, things apparently did not go as planned, and suit was filed by Veritas in May 2006 alleging breach of the joint development agreement by theft of confidential information, and infringement of U.S. Patent No. 5,469,573. Microsoft fired back in the form of counterclaims, seeking invalidity of the '573 patent, and its own claims for breach of the agreement, as well as infringement of its own patent, U.S Patent No. 5,588,147.



Trial is set for May 2008, and both parties filed for Summary Judgment on a variety of contract and patent claims. The special master's reports (more than 300 pages in length, and in several parts, attached below) recommends that the Court grant Microsoft's motion for invalidity of the '573 patent, and that there is no evidence of direct infringement of that patent by Microsoft's customers. The reports also recommend that the court enter summary judgment of no infringement by Veritas of Microsoft's '147 patent as to certain claims and that certain other claims are invalid for anticipation.



Motions for summary judgment on the contract claims were also pending and recently decided by Judge Coughenhour. In two separate orders, Judge Coughenhour held that Veritas' contract claims survive summary judgment, but that damages will be capped at $4,000,000. Microsoft's claims for breach were dismissed in view of a forum selection clause in the agreement.




In summary, this looks to be a pretty big victory for Microsoft, having damages on the contract claims capped and what looks like a pretty strong recommendation from the special master that there should be no liability for patent infringement. Microsoft may lose its '147 patent to a ruling of invaldidity, but something tells me this won't hurt Microsoft too badly. Of course, the parties have an opportunity to object to the special master's report and recommendations. The Judge is in no way bound to agree with these findings. Realistically, I think the parties will have a hard time convincing the Court to make a ruling in conflict with the special master's recommendation.



As an aside, this is apparently not the first time the W.D. of Wash. has used Gale R. Peterson as a special master in a patent case. Mr. Peterson's bio states that he served as special master in a patent case, Precor v. Life Fitness (W.D. of Wash.), the majority of which was pending before Judge Coughenhour (95-cv-00066, 97-cv-00250, 94-cv-01586, 98-cv-00694).

VeritasReport%20by%20SepcialMaster.pdf
veristasreportbbyspecialmasterpart2.pdf
VertiasReportspecialmaster%20on%20invalidity573.pdf
veritasreportyspecialmasteron147claimpart1.pdf
vertiasReport%20by%20SepcialMaster147part2.pdf
VeritasOrderSealedMPSJ.pdf
veritasOrderonMPSJ.pdf