Microsoft Fined $140 million for Piracy

Federal Court Rejects Microsoft's Bid To Overturn $142 Million Patent Judgment
26 Nov 2007
Federal court rejected Microsoft appeal of a jury decision to slap the software maker with a $142 million judgment for patent infringement.

The U.S. Court of Appeals for the Federal Circuit said it saw no reason to overturn the jury's finding that Microsoft's Windows XP and Office products breached patents held by z4 Technologies, a Michigan based company.

The Z4 Technologies holds the patent that governs the use of product activation codes for preventing software piracy. The court observed "substantial evidence supports the jury's verdict."

The court rejected Microsoft's claim that one of its older products, Brazilian Publisher '98, contained so-called prior art that should have invalidated z4 Technology's patents. Microsoft failed to meet "the burden of demonstrating by clear and convincing evidence" that BP '98 constituted prior art, the court said.

The court also nixed Microsoft's argument that the product keys users need to activate its software are not protected by z4's patents.

Microsoft also claimed that the jury, in the U.S. District Court for Eastern Texas, did not receive proper instructions from the lower court. The appeals court rejected the claim.

The court also dismissed Microsoft's request that the amount of the jury's award to z4 Technologies be reduced by 50% because it was in part based on overseas sales. Microsoft cited a recent Supreme Court ruling that patent infringement awards should be based only on sales within the U.S. The court said the issue is not subject to appeal because it was not raised during the original trial in the Texas District Court.

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