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Microsoft Held to Infringe Patent and Ordered to Pay Near-Record Damages
Anna Vishev - 4/13/2009


On April 8, 2009, Microsoft Corp. was ordered to pay $388 million in damages for infringing a patent held by Uniloc Inc.  The award of damages is one of the largest on record in patent disputes.

Uniloc, a security technology company, originally filed the suit against Microsoft in 2003 alleging that the software giant infringed Uniloc’s U.S. Patent No. 5,490,216, entitled System For Software Registration.  The patent is directed to a system that allows a user to run a particular software only if an appropriate licensing procedure has been followed.  More specifically, the patented software generates unique identifiers for licensed users and prevents unauthorized copying and installation of software programs.

In the lawsuit, Uniloc accused Microsoft of using the patented software in Microsoft’s product activation system included as part of Windows XP, Microsoft Office XP and other products.  A jury in the U.S. District Court for the District of Rhode Island agreed with Uniloc.

Not surprisingly, Microsoft intends to ask the court to overturn the verdict.  It should be noted that, in the past, Microsoft has been successful at throwing out excessive jury awards on appeal or settling cases out-of-court for a much smaller amount. Thus, it is not over yet.