Uniloc Vows Appeal In $388 Million Patent Case Against Microsoft

A security software vendor that claimed Microsoft infringed its patent is vowing to appeal a district court judge's decision to overturn a $388 million damage award against the software giant.

Uniloc USA, based in Irvine, Calif., and its Singapore-based parent Uniloc Singapore Private Ltd., won the $388 million award after a trial in April when a jury concluded that Microsoft had infringed on a Uniloc patent for anti-piracy software.

Tuesday, Judge William Smith of the U.S. District Court for Rhode Island vacated the jury's finding. But the judge also denied Microsoft's challenge to the validity of the Uniloc patent.

"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. We believe that the jury's verdict in April was thoughtful, well-reasoned and supported by the evidence presented," Uniloc said in a statement.

"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," the company said.

Uniloc sued Microsoft in October 2003 claiming that anti-piracy technology Microsoft was using to prevent unauthorized use of the Windows XP operating system and some of its Microsoft Office applications infringed on its patent.

The case went to trial earlier this year where Uniloc argued that Microsoft earned $19.1 billion in revenue from Windows XP and Microsoft Word and sought 2.9 percent of that, or $564 million. The jury ruled in Uniloc's favor and imposed the $388 million penalty against Microsoft.

Microsoft had argued that it used a different method for registering software than that used by Uniloc and that the patent was invalid. Judge Smith, in his order, said the jury that ruled in favor of Uniloc "lacked a grasp of the issues before it and reached a finding without a legally sufficient basis," according to a report from the Bloomberg news service.

The jury award was the second-largest patent verdict this year, according to Bloomberg, after a $1.67 billion verdict against drug maker Abbott Laboratories in July.

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