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Judge Sides With Microsoft, Voids $388M Uniloc Award

A trial judge on Tuesday voided a $388 million jury award to Uniloc in its long-running intellectual property dispute with Microsoft.

The Judgment can be accessed here (PDF), while the Decision and Order is available here (PDF, 30 MB).

The judge, William E. Smith of the U.S. District Court representing Rhode Island, essentially ruled that the jury was incapable of reaching the verdict that it did, which included a finding of willful infringement of Uniloc's software anti-piracy patent (U.S. Patent No. 5,490,216).

Uniloc, based in Irvine, Calif. and Singapore, went to trial charging that the Microsoft's patented product activation system for Windows XP, Windows Server 2003 and Office XP had infringed Uniloc's patent. The case was originally filed at the end of 2003.

Uniloc makes physical device recognition technology that generates user identities from the computer hardware. It uses hashing algorithms to track the "unique IDs" of software licensees. The technology employs a summation algorithm to generate the unique ID. The judge, in his Decision and Order, disagreed with the jury that Microsoft used summation algorithms in its product activation system that violated Uniloc's patent.

"A simple comparison of MD5 as a whole to the algorithm Uniloc's patent discloses clearly reveals non-equivalence," the judge stated on page 31. MD5 is the message digest algorithm that was used in Microsoft Office.

The judge added that the jury was essentially incompetent in being able to understand the issue.

"The Court has reviewed the transcripts and evidence with painstaking detail in the light most favorable to Uniloc, careful not to act as the eleventh juror. What remains is a firm belief (indeed a certitude) that the jury 'lacked a grasp of the issues before it' and reached a finding without a legally sufficient basis," the judge wrote (p. 37).

The judge even disputed that Microsoft knew about the possibility of infringement. The inventor, Ric Richardson, had "provided his 'concept' to Microsoft for evaluation in 1993," noting that parts were associated with a patent application, but "this general reference cannot support finding a knowing risk of infringement of Claim 19," according to the judge (p. 47).

Uniloc plans to file an appeal.

"We are disappointed by the decision the trial judge has made to overturn the jury's unanimous verdict in Uniloc's patent infringement case against Microsoft," a statement from Uniloc explained. "We believe that the jury's verdict in April was thoughtful, well reasoned and supported by the evidence presented. Since the patent status remains unchanged, Uniloc will continue to protect its intellectual property and appeal the Judge's decision to override the jury's verdict to the US Court of Appeals. We are confident that Uniloc will ultimately prevail."

Microsoft, for its part, was satisfied with the judge's decision.

"We are pleased that the court has vacated the jury verdict and entered judgment in favor of Microsoft," stated Kevin Kutz, a Microsoft spokesperson.

About the Author

Kurt Mackie is online news editor for the 1105 Enterprise Computing Group.

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Reader Comments:

Fri, Oct 2, 2009 Michael D. Long Knoxville, TN

Don't pass judgement on the judge until reading both patents in their entirety, and setting aside personal bias. The judges ruling appears to be sound.

Thu, Oct 1, 2009 Rob

What? Uniloc creates UIDs, then uses a hash. MD5 is a hash, and MS uses it to create a hash of the hardware UIDs. The techniques look pretty similar. I think the judge erred in his ruling and is likely to be overturned on appeal based on the current screwed up patent system. In fact, the judges entire reason for overturning the jury seems to be this: "A simple comparison of MD5 as a whole to the algorithm Uniloc's patent discloses clearly reveals non-equivalence," the judge stated on page 31. MD5 is the message digest algorithm that was used in Microsoft Office. It would seem the judge thinks MS came up with using MD5.

Thu, Oct 1, 2009 David Johnson NW Arkansas

How could anyone patent a summation algorithm? What it amounts to is look at all the sources fo a number and add all the numbers together. This is a standard tool in the programmers arsenal for weak validation. You don't need to be a programmer to see that MD5 (a hashing algorithm) is significantly different than a summation algortihm. For the record, MD5 is used almost universally for reasonably strong (but not 100%) validation.

Wed, Sep 30, 2009 Fandeboris

It doesn't say how competent the judge was to make that decision. For all we know he probably couldn't the difference between a hash mark and hash rounds

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