!022494 Microsoft owes Stac $120 million over patent infringement For those who thought the software patenting problems would go quietly away with a few procedural fixes by the PTO, THINK AGAIN, the stakes just go a lot bigger. -------- A federal jury ordered Microsoft to pay $120 million in damages to Stac Electronics, ruling that the software giant had appropriated technology patented by its much-smaller rival. The jury ruled that the latest versions of Microsoft's DOS operating system - the most prevalent software in personal computers - incorporated a Stac system for maximizing the space available in a personal computer's memory. MSDOS 6.0 and 6.2 include the feature, which Microsoft has dubbed DoubleSpace, to allow users to squeeze more data and applications onto their computer hard disks. Stac Electronics chief executive Gary Clow said the company plans to seek a permanent injunction prevent Microsoft from shipping new copies of MSDOS with the contested feature. He said he was confident a judge would grant the request. Analyst Bill Whitlow of Pacific Crest Securities said such an injunction could encourage Microsoft to settle quickly with Stac to avoid disrupting its business. Clow said the jury found in favor of Microsoft on one of seven counterclaims, awarding the software giant $13.6 million for misappropriation of a trade secret. The jury found Stac improperly discovered and used a secret feature of MSDOS to improve the operations of its Stacker 3.1 disk compression software. The $120 million verdict for Stac comes at a delicate time for Microsoft, which is under investigation by the Justice Department and the European Union for alleged anti-competitive practices. "This clearly is going to make Microsoft a lot more cautious with they do on small companies", said Charlotte Walker of brokerage Bear Stearns. -------- Any assumptions the US Patent and Trademark Office currently has about dealing with software patents should be thrown out the window. The $120 million award, the exponential rate of software patent issuance, patent infringement insurance, patent infringement investment pools, and the steady rate of questionable-to-rejectable software patents being issued, will substantially reduce the amount of time the USPTO has to deal with this problem. (Of course, I protest too loudly - such awards will eventually do wonders for patent prior art searching business :-) Novell - be very nervous. Greg Aharonian Internet Patent News Service