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Microsoft Ordered To Pay $388 Million In Patent Case 233

Posted by samzenpus
from the pay-up dept.
jeffmeden writes "BusinessWeek reports today that Microsoft suffered a loss in federal court Monday. The judge rendering the verdict ordered Microsoft to pay $388 Million in damages for violating a patent held by Uniloc, a California maker of software that prevents people from illegally installing software on multiple computers. Uniloc claims Microsoft's Windows XP and some Office programs infringe on a related patent they hold. It's hard to take sides on this one, but one thing is certain: should the verdict hold up, it will be heavily ironic if the extra copies of XP and Office sold due to crafty copy protection end up not being worth $388 million."
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Microsoft Ordered To Pay $388 Million In Patent Case

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  • One can dream (Score:5, Insightful)

    by WgT2 (591074) on Thursday April 09, 2009 @03:20AM (#27515201) Journal

    ...should the verdict hold up it will be heavily ironic if the extra copies of XP and Office sold due to crafty copy protection end up not being worth $388 million.

    Yeah, but don't count on it.

    XP has been around for a loooong time for a Microsoft OS. I'm sure they've made more than $388 million off of it... seeing as how they've been holding on to several billion in cash for several years now.

    This doesn't even consider Office sales.

    • Re:One can dream (Score:5, Insightful)

      by Opportunist (166417) on Thursday April 09, 2009 @03:33AM (#27515285)

      OP talks about $388m being made extra due to copy protection. I.e. $388m they would not have made if they did without it. And I highly doubt that.

      Has copy protection ever kept anyone from copying? At best, the "casual copier". Who has in this case even a free alternative, if he can't figure out how to torrent a version that works.

      • Re:One can dream (Score:5, Insightful)

        by msormune (808119) on Thursday April 09, 2009 @03:59AM (#27515435)

        That's not really why the copy protection is for. The protection is there so that you have to break or circumvent it in order to copy the product: It's like a lock on your front door. Sure it won't stop the robbers, but it will make it even more clear for the jury they intended to rob your house.

        So the perfect copy protection is hard to break using normal methods, but is still breakable: It shows the breaker had an INTENTION to illegally make copies.

        • Re: (Score:3, Insightful)

          by KGIII (973947) *

          Bingo, got it in one. Additionally, I don't think Microsoft has to worry much about this one. By the time the appeals are exhausted, concessions made, and lawyers paid the company may well be defunct or have been purchased outright by Microsoft. They're about the only ones left with any money.

        • Re:One can dream (Score:4, Interesting)

          by timeOday (582209) on Thursday April 09, 2009 @05:49AM (#27515975)

          So the perfect copy protection is hard to break using normal methods, but is still breakable: It shows the breaker had an INTENTION to illegally make copies.

          So, at what point did that marginal additional argument against pirates earn Microsoft $388M?

        • Re:One can dream (Score:5, Interesting)

          by QuantumG (50515) * <qg@biodome.org> on Thursday April 09, 2009 @06:10AM (#27516073) Homepage Journal

          WTF is an illegal copy?

          Show me the law that makes installing a purchased copy of Microsoft Office on more than one computer illegal.

          There isn't one, that's why they need technological measures and scare tactics to enforce it.

          • There is none yet. The pressure to push copyright law into the criminal code is heavy, and some countries are actually giving in already.

          • by msormune (808119)
            Good point there... I should have stated that I meant the actual breaking of the copy protection is illegal (well, it's illegal here in Finland, at least), not the copy.
            • by QuantumG (50515) *

              I believe that even breaking copy protection isn't illegal.. distributing tools and publishing techniques may be in some places. Here in Australia, it's only illegal if you're charging people for the tools.

              • Depends on the country.

                First couple lines of Wiki's entry on DMCA

                The Digital Millennium Copyright Act (DMCA) is a United States copyright law that implements two 1996 treaties of the World Intellectual Property Organization (WIPO). It criminalizes production and dissemination of technology, devices, or services intended to circumvent measures (commonly known as Digital Rights Management or DRM) that control access to copyrighted works

          • by fractoid (1076465)
            Um, pretty sure that breaking copyright is illegal. It's not criminal but it's illegal. Copyright law is, well, law. And breaking the law is illegal, by definition. So yeah.
            • by Shagg (99693)

              Um, pretty sure that breaking copyright is illegal.

              True. Good thing this has nothing to do with breaking copyright.

          • Re:One can dream (Score:4, Informative)

            by Zordak (123132) on Thursday April 09, 2009 @10:09AM (#27518647) Homepage Journal

            Show me the law that makes installing a purchased copy of Microsoft Office on more than one computer illegal.

            Ummmm... How about Title 17 of the United States Code? 17 U.S.C. s.106 grants the copyright holder the exclusive right to make copies. Section 501 says violating any of the exclusive rights of a copyright holder (including section 106) is a copyright infringement. Installing a copy of Microsoft Office on your hard drive is making a copy of the program (in fact, even just loading it into RAM is making a copy), so you can only do that with a license from Microsoft. Microsoft granted you a license to install it on one computer. So installing it on more than one computer is an infringement of their copyright.

            And no, section 117 won't save you here. That only permits additional copies for archival purposes, or copying into RAM as an essential step in running the program. It doesn't grant you the right to install on more than one computer.

            • Re: (Score:3, Interesting)

              by mea37 (1201159)

              Section 117 may not save you WRT putting the program on two hard systems' hard drives (though it does make your comment about "making a copy into RAM" incorrect). Since typical programs these days will not function from the installation CD, I'd argue that section 117 also means I don't need a license to install the program on a single computer. (The theme at which I'm driving is, I don't think I need an EULA at all to use a program I acquire legally. But that's probably a broader topic.)

              Given how section

        • That's not really why the copy protection is for. The protection is there so that you have to break or circumvent it in order to copy the product: It's like a lock on your front door. Sure it won't stop the robbers, but it will make it even more clear for the jury they intended to rob your house.

          So the perfect copy protection is hard to break using normal methods, but is still breakable: It shows the breaker had an INTENTION to illegally make copies.

          Good idea, but it's not true in Microsoft's case. They haven't ever sued any individual end users for installing a cracked XP, so the idea of proving intent is moot. They have gone after mass producers, but in that case intent is already clear and the lock hasn't been broken yet, per se.

      • by pegdhcp (1158827)
        Is there a copy protection in XP? Although I am using legitimate XP(you know, game producers, they would newer learn...) at home and Linux at work, from what I see in the market I was not aware there was a copy protection aside from crappy product code control and crappier MS Update tricks they pull. I do not think neither of these "methods" deserve a Patent. So, although I cannot believe what I am writing but, if this is the whole matter, then the following claim by M$ is right.

        We believe that we do not infringe, that the patent is invalid and that this award of damages is legally and factually unsupported

        • by jonbryce (703250)

          Yes there is. You have to activate within 30 days or you can't use the software.

          There are patches around that get round that, but if you run Windows Update, then from time to time, the patched copy of the relevant file will get updated with a real one, and then it will discover that you don't have a legit copy, and you can't use the software until you find another patch.

          Alternatively it means you can't run Windows Update, and your computer gets left open to all the security exploits that it might otherwise

      • by Ilgaz (86384)

        Imagine billions wasted in corporate image, support calls, downtime and even people lost to OS X or Linux which doesn't need such things.

        I recently mistyped a Vista ultimate license and just while owner leaving for airport, I could barely notice a small font ''This copy of Vista will stop working in 3 days if not activated with valid serial''. I ended up holding laptop and reading the serial again trying to figure what letter I typed wrong.

        People always assume OS X or iLife doesn't need activation or serial

  • it will be heavily ironic if the extra copies of XP and Office sold due to crafty copy protection end up not being worth $388 million.

    XP was released in 2001. 400 million copies were in use by 2006. Assuming a paltry $1 profit on every copy sold (it's way higher, but just for the sake of argument), they have already broken even 3 years ago.

    That doesn't even include the Office cash cow.

    Sorry, it is actually anti-ironic. Anironic. The opposite of ironic. Cinori. Aronic.

    • by afidel (530433) on Thursday April 09, 2009 @03:32AM (#27515279)
      You're missing the point, nowhere near 100% of Office or Windows sales can be attributed to the anti-piracy measures built into their activation systems. In fact I would suggest that the number is near zero as pirated copies of Windows and Office releases are available for download before the product even launches for all who care to pirate them. So now Microsoft has the cost of developing the activation system, the cost of maintaining the activation servers, the cost of implementing Genuine Advantage, and now the cost of this judgement. All because some PHB honestly believes that Microsofts paltry activation systems significantly contribute to revenue retention and growth. Much of the software industry has been infected with the notion since before the days of MS DOS despite the mountain of evidence to the contrary.
      • by dontmakemethink (1186169) on Thursday April 09, 2009 @04:55AM (#27515691)

        Oh come on... $388M is like a parking ticket to Microsoft. They're only appealing the decision to dissuade the hundreds of other would-be claimants from filing the thousands of pending 9+ digit suits against them. They employ more lawyers than programmers ffs!

        Now more than ever, their shareholders are screaming for them to make more money, not better software! What is M$ better at, making money, or good software?

        • ...They employ more lawyers than programmers ffs!

          Well, at least that helps explain their track record of software quality.

          Now more than ever, their shareholders are screaming for them to make more money, not better software! What is M$ better at, making money, or good software?

          Your Honor, in the case of Money vs. Quality, I bring forth Exhibit A, a computer that is running Windows ME...

          'Nuff said.

        • by melikamp (631205)

          This is a very large parking ticket, more than 2 percent of their net income in 2008.

    • Re: (Score:3, Informative)

      by jimicus (737525)

      You're mis-counting.

      Your numbers would hold up if you assume that every single person on Earth who uses XP (except, presumably, the person who purchased the first copy) had pirated their copy from this first person.

      The set of numbers you want is people who:

      • Planned or attempted to pirate XP but was put off by the anti-piracy measures and instead went and purchased a legitimate copy (including those who were sold an illegal copy in good faith by a dishonest supplier).
      • Purchased a legitimate copy which was inco
    • The argument is that the EXTRA copies sold because of the copy protection might not be worth it.

      EXTRA, not TOTAL.

      Comprehensive reading, you fail it.

      • by Joce640k (829181)

        The answer will be a resounding YES.

        $388 million is about three days profit for Microsoft, as the person who wrote the headline ought to know.

    • by mgblst (80109)

      Yes, good point, because if there was no copy protection on Windows or Office, then EVERY SINGLE PERSON WHO BOUGHT IT WOULD HAVE PIRATED IT! Fucking brilliant.

  • $388M or $38M? (Score:3, Informative)

    by amazeofdeath (1102843) on Thursday April 09, 2009 @03:31AM (#27515265)

    PC World has the figure at $38 million, which one is right? News item here: http://www.pcworld.com/businesscenter/article/162832/microsoft_loses_antipiracy_patent_case.html [pcworld.com]

  • cleverly... (Score:5, Funny)

    by catmistake (814204) on Thursday April 09, 2009 @03:41AM (#27515327) Journal

    Microsoft will find a way to pay them with copies of Windows XP.

  • Karma (Score:4, Funny)

    by NfoCipher (161094) on Thursday April 09, 2009 @03:47AM (#27515369) Homepage

    This is what they get for suing TomTom. What goes around..

    • Serves the bastards right for saber-rattling about people infringing on their patents, and dabbling in the world of patent trolling. Troll gets trolled, now THAT'S a headline.

    • Re:Karma (Score:5, Insightful)

      by wild_quinine (998562) on Thursday April 09, 2009 @04:30AM (#27515571) Homepage

      This is what they get for suing TomTom. What goes around.

      This is slashdot, so an article in which someone does something generally accepted as bad but does it to Microsoft - and to their DRM, no less! - causes some kind of minor implosion.

      Argghh.... Don't.... know... how ... to feel...

      It doesn't matter two shits what this means to Microsoft, and it doesn't matter two shits what this means to DRM. This is definitely not a situation in which two wrongs somehow magic up a right.

      This is just another story about why patents are damaging innovation in the USA, and on a global scale. But don't think that innovation enjoys being held back like this. If this situation is not fixed, we'll suffer - at most - a few more years of this BS, before the rest of the world moves on without the US.

      Don't think it can't happen. If anything the current financial situation makes it more likely. Who's got the time or money to sit around being scared of the US Patent Office?

      • Re:Karma (Score:5, Funny)

        by NoobixCube (1133473) on Thursday April 09, 2009 @04:44AM (#27515637) Journal

        Two wrongs don't make a right, but it does create a warm fuzzy feeling to know someone who wrongs others gets a little of it back. I don't approve of software patents, don't get me wrong, but it is kind of funny that Microsoft spent all that time rumbling about patent infringement and then get slapped with a massive patent infringement bill.

        For some reason, I just had a mental image of Marie Antoinette being drowned in a vat of cake-mix...

        • $300 million is peanuts to MS, it's more like chucking a stale cupcake at Marie Antoinette.

          • Re: (Score:2, Informative)

            by LordLimecat (1103839)
            A quick googling and a peek at an MSFT investor relations article brings this [microsoft.com] up:

            January 22, 2009 â" Microsoft Corp. today announced revenue of $16.63 billion for the second quarter ended Dec. 31, 2008, a 2% increase over the same period of the prior year.

            A little quick calculation shows that $388 million is slightly less than 2.4% of that--which neatly wipes out that gain on the previous year.

            Just because its not devastating to them doesnt mean its insignificant.

      • Sort of like hating fraudsters but having a good feeling about fraudsters being scammed [419eater.com] themselves

    • This is what they get for suing TomTom. What goes around..

      He who lives by the sword ...

  • by El_Muerte_TDS (592157) <elmuerte.drunksnipers@com> on Thursday April 09, 2009 @03:50AM (#27515387) Homepage

    So, who's next? SecuROM, Valve, ... basically every DRM that uses online activation?

    • by furby076 (1461805)

      basically every DRM that uses online activation?

      Blizzard imo. This judge is a moron who set very bad precedent - and now that they have precedent they can sue any company that uses this kind of registration. I see Adobe in the newspaper in the near future.

  • by AHuxley (892839) on Thursday April 09, 2009 @04:10AM (#27515475) Homepage Journal
    Microsoft researchers can show the fine should be decrease by 3-3000 times.
    ( from http://hardware.slashdot.org/article.pl?sid=09/04/08/1733206 [slashdot.org] )
  • Take sides? (Score:4, Interesting)

    by igaborf (69869) on Thursday April 09, 2009 @04:50AM (#27515673)

    It's not hard to take sides at all. Software patents are bad. Period.

    The only possible silver lining to this is that it helps demonstrate the badness of software patents.

    (OK, seeing Microsoft discomfited is a little nice side effect, too.)

    • Re: (Score:3, Insightful)

      by argent (18001)

      It's not hard to take sides at all. Software patents are bad. Period.

      Indeed, I agree with Microsoft on this: "We are very disappointed in the jury verdict. We believe that we do not infringe, that the patent is invalid and that this award of damages is legally and factually unsupported," Microsoft spokesman David Bowermaster said in a statement. But of course that's because ALL such patents, including Microsoft's patent on the FAT file system, are invalid.

      • Re: (Score:3, Informative)

        by Elektroschock (659467)

        Software patents are trivial because what they protect is not scarce.

        Microsoft gets the paycheck for what it resisted so violently, even with lobbyists in third nations: sane patent reform.

        Read this IPwatch article to get an idea what is going on in the Microsoft community. [ip-watch.org] Phelps says:

        What we've tried to do with "Burning the Ships" is take IP questions out of the realm of arcane debate among lawyers and show real people, in the midst of a highly dramatic internal struggle at Microsoft, learning how to deploy IP for tangible business benefit. As one reader put it, the book is a "thoroughly entertaining and informative canâ(TM)t-wait-to-get-to-the-next-page read."

        Marshall Phelps wants to turn Microsoft into a kind of patent troll, or as they call it "open innovation".

        IPW: A basic lesson in the book could be interpreted as, 'We were getting hurt by others who had patents, so we used our market power to require partners to agree not to enforce their patents until we had enough of our own patents to start enforcing them the way we didnâ(TM)t want others to do to us.' Can you address that?

        PHELPS: Remember, this was back before software patents were a fact of life. MS was just getting a real head of steam but wasnâ(TM)t at all sure patenting was the way to go.

        So either Microsoft kicks its bastards out or it simply deserves to suffer from these fines of a rotten patent system [princeton.edu].

        A

    • by mjrauhal (144713)

      Exactly, software patents are bad, period.

      Therefore, every time a major pro-software patent lobbier gets significantly bitten by them, it's good, because it deincentivizes said lobbying.

      There may be an uncomfortable PR side effect, though, in that the lobbier can then say "look, we're on the giving end also". However, as the patent system slowly makes things more and more difficult even to the pro-patent lobby, I believe this slight PR effect is outweighed by said disincentive.

      (Of course, the disincentive d

    • by Locklin (1074657)

      It shows how well software patents work for Microsoft.

      Big boys can pay $300 million, and go on to sue someone else -the games continue. If you can't poney up that kind of cash, software development is a risky business.

  • by tangent3 (449222) on Thursday April 09, 2009 @05:22AM (#27515849)

    ...die by the patents.

    • Re: (Score:3, Funny)

      by MartinSchou (1360093)

      Nah, that's an old one. I like the updated version much better:
      "He who lives by the sword is shot by someone who doesn't"

  • WGA (Score:4, Funny)

    by InsertWittyNameHere (1438813) on Thursday April 09, 2009 @06:49AM (#27516325)

    Does this mean I'll have to give up my Windows Genuine Advantage tool? I was enjoying the convenience of the frequent black screens, nag screens and reboots.

  • by Bryan Ischo (893) on Thursday April 09, 2009 @07:04AM (#27516449) Homepage

    It's actually easy to take sides on this one. Software patents are WRONG, and so I'm on Microsoft's side. For once.

  • http://www.google.com/patents?id=K7MoAAAAEBAJ [google.com] As you can see, we can blame an Aussie for this one! Attaaaaaaack.
  • by Madball (1319269) on Thursday April 09, 2009 @07:29AM (#27516629)
    Good luck with that. Here's a snippet of patent (claim 1).

    1. A registration system for licensing execution of digital data in a use mode, said digital data executable on a 55 platform, said system including local licensee unique ID generating means and remote licensee unique ID generating means, said system further including mode switching means operable on said platform which permits use of said digital data in said use mode on said platform only if a licensee 60 unique ID first generated by said local licensee unique ID generating means has matched a licensee unique ID subsequently generated by said remote licensee unique ID generating means; and wherein said remote licensee unique ID generating means comprises software executed on a plat- 65 form which includes the algorithm utilized by said local licensee unique ID generating means to produce said licensee unique ID.

    Say what?
  • It's hard to take sides on this one,

    What is this more /. fud? Get a story posted on /. by saying "i am confused, I hate patents but I hate MS and this patent hurt MS". If you think patents suck then you should be defending MS in this case - otherwise you are a hippocrit. If you think patents are OK then you can cheer as MS got slammed.

    Not knowing the exact nuances of this patent I think it is retarded and so is the judge for allowing a patent on preventing software frmo being installed on multiple computers. Well now this company is goi

    • There is no hipocrisy on cheer as MS got slammed by the same tool they created (or loobied toward the creation) in order to slam the small guys.

      If there is any hipocrisy anywhere here it is within MS, by violating a software patent.

      • by furby076 (1461805)

        There is no hipocrisy on cheer as MS got slammed by the same tool they created (or loobied toward the creation) in order to slam the small guys. If there is any hipocrisy anywhere here it is within MS, by violating a software patent.

        You are obviously an anti-MS fanatic who can't see reason (that's why you are a fanatic). MS created a tool and someone is sueing them YEARS after the tool had been established - a submarine patent. This is something /. users have stated they hate for many years. Now MS is getting sued by a submarine patent and you are saying "as they should". MS did not do anything hypocritical and you obviously do not know what that word means. What you are attempting to say "they created a tool that I do not like and

        • by canajin56 (660655)
          The tool he mentions isn't online activation, it is patent trolling. MS loves it. They published the spec for FAT and encouraged everybody to use it, and waited over a decade, mere months before it would expire, before going out and suing everybody because FAT was patented. And I do hope they bury Blizzard next, after Blizzard got a ruling that, contrary to the wording of the Copyright Act, it is illegal for your computer to copy a binary from HD to memory without a license, and therefore if you violate
  • Microsoft is now primed to buy Uniloc to recover its lost $388 million dollars, continue using Uniloc's technology without license, and smite those who dare to obstruct its omnipotence.

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