Microsoft, GM, Schwab, Halliburton Sued Over Network Security Technology

In court papers filed in the U.S. District Court for Eastern Texas, William Reid claims that the network ID management systems used by the defendants violate U.S. patent 6,131,120, which Reid owns and which describes an "Enterprise Network Management Directory Containing Network Addresses Of Users And Devices."

"Microsoft has been and continues to infringe directly and indirectly on one or more claims of the [patent]," according to Reid's suit, which was originally filed in 2005. A so-called Markman hearing, during which a judge will rule on the meaning of terms used in the complaint, is scheduled for May.

Virtually all corporations use such systems to authenticate and verify the identity of individuals logging onto their computer networks.

In his suit, Reid claims that Halliburton's use of Microsoft's Active Directory technology to create its ID management system violates the patent. Reid further claims that Active Directory itself, as well as Microsoft products that embed the technology, including Windows 2000 Server and Windows Server 2003, violate his patent.

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In court filings, Microsoft, GM, Schwab, and Halliburton all deny violating Reid's patent. Halliburton, however, has asked Microsoft for indemnification should it lose the case. "Microsoft stands behind its technology. As such, Halliburton has tendered an indemnity demand to Microsoft if Halliburton is found to infringe in this case," Microsoft says in a related filing.

In an interview, Reid, who says he worked on artificial intelligence for IBM from 2000 to 2002, says he determined that GM, Schwab, and Halliburton were violating his patent after visiting a trade show. Reid says he watched presentations by IT officials from the companies while attending the Burton Group's Catalyst conference. "They made presentations and distributed material that described their architectures," says Reid.

Word of the suit marks the latest in a series of legal headaches for Microsoft. On Monday, it emerged that the company is being sued over its use of the Office Live name for a suite of online business productivity tools. Last week, Microsoft was ordered to pay Alcatel-Lucent $1.5 billion for violating patents related to the MP3 music format.

Reid is seeking unspecified damages.