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10 November 2015Patents

Microsoft forks out almost $5m to settle patent lawsuit

Technology company Microsoft has agreed to pay licensing company Network-1 Technologies $4.65 million in order to settle a patent c ase.

At the centre of the dispute was US patent number 6,006,227, called “Document stream operating system”. The patent covers the storage of files within an operating system in chronological order.

The patent, registered at the US Patent and Trademark Office, is due to expire next year.

Mirror Worlds Technologies, a subsidiary of Network-1, sued Microsoft in 2013 at the US District Court for the Eastern District of Texas accusing it of infringing the ‘227 patent. It claimed that Microsoft’s Windows operating system was infringing the patent.

Also named as defendants in the lawsuit were technology companies Samsung, Dell, Lenovo and HP, and retailer Best Buy. The companies were accused of selling products that used Windows.

Citing the US Supreme Court’s decision in Alice v CLS Bank Microsoft responded claiming that the patent covered an abstract idea and was therefore invalid. In Alice, the Supreme Court said that Alice’s patent covering the computer implementation of a financial risk management scheme is a “ patent-ineligible abstract idea”.

But Judge Robert Schroeder, presiding over the case, rejected this argument stating that abstract ideas asserted in the ‘227 patent is “necessarily directed to improving computer technology” in July.

On Monday, November 9, Network-1 confirmed that Microsoft will pay $4.65 million and in return obtain a license to use the patented technology. The deal means that litigation against the other defendants has also ended.

Mirror World also filed a patent lawsuit against Apple concerning the infringement of the ‘227 patent. However, the parties have not announced a settlement and a trial is scheduled to start in June next year.

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