RSSMicrosoft used software activation without a license, jury finds
By Scott M. Fulton, III | Published April 9, 2009, 12:56 PM
In a unanimous and complete decision by a Rhode Island US District Court jury yesterday, Microsoft was found guilty of willfully infringing upon an inventor's 1996 patent for a continual software activation and licensing system -- effectively saying that Microsoft stole the technology for preventing users from stealing its technology. The inventor -- an Australian named Richard B. Frederickson, III, of Uniloc Private, Ltd. -- was awarded $388 million USD, or more than half a billion Australian dollars.
The records on Frederickson's suit, dating back to 2005, are too old for public online availability, otherwise we'd do our usual citation of the original suit. But the single patent that Frederickson was defending was for a system that only enables software to run at any time at all, only if the licensing mechanism lets it do so. It's the software activation scheme that has become one of Windows' and Office's trademarks -- the very system that Microsoft first introduced to Betanews in 2001. At that time, the company emphasized the discovery it claimed to have made, of a system that can detect when the underlying hardware for the software has been changed from the original point of licensing, to disable images of that software from being copied and run on multiple PCs.
As Frederickson's 1996 patent summary describes it, "In broad terms, the system according to the invention is designed and adapted to allow digital data or software to run in a use mode on a platform if and only if an appropriate licensing procedure has been followed. In particular forms, the system includes means for detecting when parts of the platform on which the digital data has been loaded has changed in part or in entirety as compared with the platform parameters when the software or digital data to be protected was for example last booted or run or validly registered."
The jury verdict showed that Microsoft's defense was not that Microsoft had discovered the concept of software activation for itself -- as it has claimed in 2001 -- but that Frederickson's patent was invalid due to prior art. Specifically, Microsoft claimed that another inventor came up with the basic distribution principle in a 1983 patent for a software distribution mechanism invention. The jury unanimously voted "No" on Microsoft's defense claim. Microsoft also claimed that the whole notion of software activation was obvious enough not to require an invention. Granted, Microsoft did not cite any patents it may have held -- if it had, it could have countersued on the basis of their validity. Again, the jury voted "No."
In a statement first issued to Reuters this morning, Microsoft stated it will ask the court to overturn the verdict, but did not give any indication that it might appeal. A willful infringement victory, if upheld, does not necessarily mandate that Microsoft must now obtain a license to use the technology from its inventor; the $388 million may be seen as effectively covering any license fee.
Setting aside the MS issue, This verdict on a patent that never was brought to market should case a pale over most software that uses a product key to activate. Even programs on this site may have a 15-30 day trial period but then you have to use a legal activation key to continue to use the program. This verdict would seem to put most software at risk. Now I am sure this person sued MS because they have money but if we take this verdict to its logical conclusion then all software may be at risk. Of course, if he gets the award then he won't have to bother suing other companies.
This also brings up the issue in the tech field that it is almost impossible now to build new technology that doesn't have some basis on patent technology that never went to market.
This case illustrates that we need to completely revamp our whole patent/copyright laws to recognize 21 century reality.
Even open source could be at risk since I suspect that if one looked closely at open source, you could find older patent technology. Once example would be browsers and another would be search engines.
I would also suspect that apple might need to be careful as if you were to break down their code on their various products you would find older patent technology that hasn't been brought to market.
Score: 3
|one of the american business financial models is to take/steal/have it now, then pay later if necessary.
out of the billions that microsoft made for each o.s. sold, 388m was just a drop in the bucket and will likely chalk it up to "losses" in the p&l.
on the other hand, if microsoft would have simply and initially paid 50M for his idea, microsoft would have saved 333M plus legal fees.
unfortunately, the penaly microsoft paid doesn't mean it own the rights to the invention. therefore, what microsoft will have to pay will likely be 388m "plus" royalties.
Score: -1
|except that it this technology was never put in use. People that create and develop ideas to sit on and wait for companies to sue should have their patents revoked and opened up. without seeing the original patent document, one cant make an educated decision on the ruling, but if this is like any of the other retarded patent suites over the last 30 years it;s just common sense that a software company would want 1 install per license and any patent on the idea that was never put into practice should be opened for fair use.
companies without greed wont be companies much longer. Sure MS makes hundreds of millions off Windows...but they still make new versions, release updates, and provide support up to 5 years after a product has reached EOL just as many other major software companies do. MS makes the same relative $ off Windows XP than they do Vista, so why even develop Windows 7? why not wait 5 years and stretch out development costs across 8 years instead of 4 or 5?
any lawsuit like this, if it's as stupid as many of us suspect, costs a legitimate company money and placed into individuals/companies doing nothing to better the industry. where do you think this $388 million comes from? certainly not MS...when people learn that all added costs incurred by any business will eventually be offset by higher prices or lower quality or lesser services, then maybe they'll stop supporting all this anti-big business BS.
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|actually, i think it is a pretty wise idea to invent something and ensure it is protected. that way when such a lawsuit is initiated the financial return will be greater.
companies always steal ideas from the little guys and then pay big time later. for example the coolant reservoir of a car and the delay timer for windshield wipers.
the cost microsoft had to pay for ripping off some one else's registered idea seems costly. but in fact, microsoft saved billions from not having its invention pirated with the use of another guys invention.
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|I think that each one have to pay that each one use, and if they wasn´t licenced to use an aplication they have to pay money for that and have to pay too all the time that they were using that aplication without its owner permission.
Well that´s what a think...
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|I wonder if he has to pay a tax on that, haha
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|Wonderful music to my ears. The thieving bully gets a just reward--hoist with his own petard.
What irony....
....Isn't experiencing Schadenfreude just wonderful?
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|Score: 0
|This makes me wonder if Jury's don't see Microsoft vs the small guy and tend to lean towards the small guy regardless of whether it makes sense or not.
Microsoft has lots of money, so why not give it away is what they probably think.
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|If you are worried the software you use might infringe on IP rights, and access to your data may be compromised by legal action, you need to switch to 100% Open Source software. No secrets means no infringement. Much more reassuring than buying software from a company that seems to always be in court for stealing ideas.
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|That assumes that your OSS author(s) haven't infringed on any patented work, which is certainly not a given. Consider the tons of ridiculous patents one could inadvertantly stumble over or the software that's deliberately designed to copy another work no mater what the consequences. OSS does not necessarily mean instant righteousness.
Score: 1
|Getting past the tired old anti-Microsoft blathering that one expects from the usual suspects on this site... this really is a great example of an obvious invention. Pity the jury didn't have half a brain between them.
This is another patent that should go in the "Reasons Why We Need Patent Reform" column.
Score: 2
|I agree... the system is hardly extremely complicated or (as far as we know) a real copy of anything, just a copy of an idea, really. MS really needs to have their lawyers look very carefully (lord knows they can't write a search product to do it for them) before doing anything.
This would be like Xerox going and suing MS and Apple for using icons (assuming time weren't an issue).
And $388 million? What the bloody hell? The guy got the patent 8 years before MS came out with their system, apparently used it for nothing himself, sold it to no company, and obviously didn't make any money from it... and even with punitive damages, how the hell does he deserve $388 million? The bloody thing has probably cost MS money, not made it $400 milll.
MS's mistake was probably in their legal arguments, but juries... ugh.
Score: 0
|MS is a bunch of idea stealing crooks, we all knew this going back to Xerox, the mouse, and the winodws / taskbar ideas that 3.1 was built on. This is why I don't feel the least bit bad for sticking my copy of Office on what has to be a hundred computers by now. There is a universal activator that eliminates the process all together. MS was nice enough to supply a converter so when someone sends me files in 2007 format, I can still open them.
Score: -2
|Such a good little pirate...
Music? Aww...the RIAA is Bad™, so it's OK.
Movies? Awww... The MPAA is Bad™, so it's OK.
Software? Awww...the software companies are Bad™, so it's OK.
Rationalization... Millions of idiots using flawed logic to convince themselves of their own moral superiority can't be wrong...
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|Did know some guy devoted a whole website about what a jagoff you are, PC Tool?
Score: -1
|PC_Tool is right - lame justification for why you're nothing more than a thief.
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|AHHH the IRONY!!!! hahahahahahahahahahahaha
Score: -1
|And the true irony is that it really doesn't work. It only keeps out legal owners.
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|"It only keeps out legal owners."
...or the folks they're actually targeting with it?
WGA was only ever intended to hinder "Casual Piracy/Copying", not the USENET/IRC or Torrent folk. (Say, attempting to install the same license on multiple systems in the house...without even really knowing it's not supposed to be done that way)
Score: -1
|Congratulations Richard B. Frederickson, III
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|Maybe I just don't get it but I could have an idea and patten it without even knowing how to come up with the end result? So if I would have had the idea and patented 20 or so years ago of a phone without a cord even though I would have no idea how to make such a thing and all the cordless and cell phone companies would have to be paying me to use my idea. I may be way off on that and if so please be nice but it just seams stupid. The whole idea of small inventors getting ripped off by big corp. What about good ideas being patented by someone therefor tying the hands of corp. who can actually make it happen.
Score: 1
|No, you really can't patent just an idea -- I know the description in the summary makes it seem like all Frederickson had was an idea. But the patent explains the methodology as well, and it would appear the jury got a good look at that methodology.
-SF3
Score: 0
|You can't just patent a vague idea like 'let's make a phone that doesn't need wires'. You have to detail exactly how your idea is actually going to work. That's what you're patenting.
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|didn't thomas edison ripped off the two hill billies that connected two tin cans with a string between the farm house to the moon shine still?
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|Next step: removing it from Windows*
*extreme wishful thinking
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|perhaps, you can develop a reversal in linux.
then m$ will pay you 388M to keep it off the market.
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|the invention creates a security protocol oherwise known as a "hardware hash"
not surprised that the small inventors get ripped off by big corporations.
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|$388M
Yup, he sure got ripped off for not actually producing anything.
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|Ripped off as in Microsoft ripped off his idea, claiming it was too "obvious" of an invention to merit a patent. This coming from a company that owns a patent on the IsNot boolean operator. http://tinyurl.com/6d4wf
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|For $388M you can have the rights to any idea I or anyone I know has ever had.
Of course, in the case of sjc, he will pay you $5 (that his mom gave him) to take any idea he might have. Wait for it....I'm sure he is trying mightily hard to have one....
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