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 PostPost subject: Patent penalty against Microsoft increased $25 million        Posted: Tue Aug 22, 2006 5:09 am 
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Fri Aug 18, 2006 12:10 pm


New Zealand
Patent penalty against Microsoft increased $25 million

Microsoft willfully infringed on the patents of a small Michigan company and engaged in litigation
misconduct in its effort to defend itself, a federal judge ruled Friday.

U.S. District Judge Leonard Davis upped a jury's award against Microsoft by $25 million, plus nearly
$2 million in legal costs. He cited several instances of misconduct and "ample circumstantial
evidence" that Microsoft viewed the patent-holder, closely held z4 Technologies, as "a small and
irrelevant company that was not worthy of Microsoft's time and attention, even if Microsoft was
potentially infringing its patents."

The case centers on patents held by z4 founder and President David Colvin for "product
activation" technology, designed to limit software piracy. z4 alleged Microsoft Office products
infringed on its patents beginning in 2000; the alleged Windows operating system infringement
began in 2001.

z4 sued in September 2004 and won a jury verdict of $115 million from Microsoft and $18 million
from another defendant, Autodesk, the computer-aided design software maker. The judge added
$322,000 in z4 legal costs to Autodesk's penalty.

In addition to granting z4's motions seeking enhanced damages Friday, Davis also rejected motions
by the defendants for a new trial and other judgments.

"I'm very gratified that the process works," Colvin said Monday. "... It's certainly good news to me
and really good news to all the small companies and independent inventors alike in this country."

Microsoft plans to challenge the decision at the U.S. Court of Appeals.

"Obviously, we're disappointed," Microsoft spokesman Jack Evans said in an e-mail. "We believe
that the facts in this case clearly show that Microsoft and others developed their own product
activation technologies well before z4 Technologies claims to have created this technology."

Autodesk did not return calls for comment.

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