Z4 files New Patent Infringement Suit Against Microsoft

After winning a huge victory againts Microsoft before the Federal Circuit Court of Appeals (I had reported the verdict was $160M here, this includes the $18M verdict against co-defendant Autodesk, Inc.), Plaintiff Z4 Technologies filed a new infringement lawsuit against Microsoft's Office 2007 and Vista products. The case is filed in The Eastern District of Texas on the same patents. According to Z4's Complaint, “In its Vista and Office 2007 products, Microsoft has made an insignificant change in Product Activation technology found to infringe in [the prior case against Microsoft].” After victory before the Federal Circuit it will be interesting to see where this case goes. According to an article in IP 360, damages have not been estimated and Microsoft denies that its Vista and Office 2007 Products violate the patents. The patents at issue are U.S. Patent Numbers 6,044,471 and 6,785,825. The ‘825 patent, issued in August 2004, is titled “Method for securing software to decrease software piracy” and deals with using an authorization code to enable software. The ‘471 patent, issued in March 2000, has a similar title, “Method and apparatus for securing software to reduce unauthorized use,” and relates to using a password or a series of passwords to operate software. Click here for a link to download the patents.

Federal Circuit Affirms $160M Verdict Against Microsoft

The Federal Circuit Court of Appeals affirmed [pdf] a $160M verdict against Microsoft and Autodesk, Inc., for infringement of US Patent Nos. 6,044,471 and 6,785,825. The '825 patent is for a "method and apparatus for securing software to decrease software piracy," and it relates specifically to using unauthorized code to enable software while the '471 patent covers a "method and apparatus for securing software to reduce unauthorized use," and it relates to passwords used for the operation and access to data through software. Both patents were acquired by plaintiff, Z4 Technologies.

The appeal came from -- you guessed it -- the Eastern District of Texas, where Judge Leonard Davis had denied post-verdict motions for JMOL and granted Z4 its attorneys fees ( $1,978,000 from Microsoft and $322,000, for a total fee of $2.3M, a bargain if you ask me) and directed Microsoft only to pay enhanced damages of $25M.

On appeal, Microsoft asserted through its attorneys, Fish and Richardson, that the patents were invalid as a matter of law. The federal Circuit treated the jury's verdict of no invalidity with the usual deference, and the appeal was lost due to the existence of "substantial evidence" of validity.

Microsoft also argued that the jury was not properly instructed on the issue of invalidity, saying that it was error for the court to refuse to tell the jury that the burden to prove invalidity was "more easily carried when a reference on which the assertion is based was not directly considered by the Examiner during prosecution." Citing the possibility for jury confusion from such an instruction, the Federal Circuit decided that remand was not necessary.

A permanent injunction was denied by Judge Davis against Microsoft. The injunction, in granted, could have halted sales of Windows XP and other Office products some of which had been sold since 2000. Autodesk stipulated to entry of an injunction, agreeing to implement a design around these patents.

Overall, this was a huge victory for Z4 and their lawyers, Brooks Kushman.

Download patents here [pdfs].

US6044471%5B1%5D.pdf
US6785825%5B1%5D.pdf