Entrepreneur David Colvin's company z4 Technologies had
previously won its case that Microsoft's Windows XP operating
system and software from Autodesk infringed its anti-piracy patent
which describes a form of product activation.
Z4 was awarded $133 million from the two companies by a Texas
jury and went on to argue for a permanent injunction against
Microsoft using the technology. That demand has been rebuffed.
Since z4 does not make any products and since the product
activation function is only a small part of Windows, the court said
that an injunction would be inappropriate.
"Microsoft’s continued infringement does not inhibit z4's
ability to market, sell, or license its patented technology to
other entities in the market," wrote US District Judge Leonard
Davis. "Microsoft does not produce product activation software that
it then individually sells, distributes, or licenses to other
software manufacturers or consumers. If it did, then z4 might
suffer irreparable harm in that Microsoft would be excluding z4
from selling or licensing its technology to those software
manufacturers or consumers."
"However, Microsoft only uses the infringing technology as a
small component of its own software, and it is not likely that any
consumer of Microsoft’s Windows or Office software purchases these
products for their product activation functionality," he wrote.
The case follows the precedent set in May when eBay was allowed
to continue to infringe a patent held by MercExchange. The Supreme
Court ruled that it should not be banned from continuing to
infringe as long as it paid the patent holder.
That case was a landmark one since decisions previously had
presumed that the "general rule" that an injunction should almost
automatically follow an infringement was almost always to be
applied. The case expanded the practical meaning of the
"exceptional circumstances" in which an automatic injunction should
follow.
Each case hinged on a "four-factor test" traditionally used in
such cases. They are: irreparable injury to patentee (z4); remedies
available at law (is money sufficient?); balance of hardships, and
public interest. On each of the four criteria the court found for
Microsoft.
Microsoft was also recently found to have infringed another
patent, that held by Guatemalan inventor Carlos Armando Amado. He
was awarded $9 million for Microsoft's infringement of his
technology which linked Microsoft Excel spreadsheets to Access
databases. Amado had sought $500 million in damages.
