Salesforce.com, i4i, Android Marked Microsoft's Legal Battles in 2010

 
 
By Nicholas Kolakowski  |  Posted 2010-12-23
 
 
 

Salesforce.com, i4i, Android Marked Microsoft's Legal Battles in 2010


Microsoft found itself at the center of a number of intellectual-property battles throughout 2010, as lawsuit fever seemed to grip the tech industry as a whole. Despite the intercompany partnerships seemingly signed on a weekly basis, the rapid pace of innovation in markets such as smartphones, and the resulting billions in potential profits, led any number of corporations to open fire on each other like so many 17th century ships of the line.

By the final months of 2010, Microsoft found itself locked in a game of intellectual-property suit and countersuit with Motorola, which was also being sued by Apple, which in turn was fighting battles with HTC and Nokia over the rights to certain mobile technologies.

But Microsoft's most prominent case of 2010 might turn out to be the continuing intellectual-property battle with Canadian firm i4i, which sued the software giant for allegedly infringing on its patents for custom XML. An in-depth breakdown by eWEEK of i4i's patent can be found here.

In August 2009, a federal judge in the U.S. District Court in Eastern Texas ordered all copies of Word 2003 and 2007 to be removed from retail channels within 90 days. Microsoft's attorneys argued for a delay, but, four months later, the U.S. Court of Appeals upheld the verdict, ordering that all offending copies of Word be yanked from stores by early January 2010.

Microsoft then asked for a review by all 11 judges on the U.S. Court of Appeals for the Federal Circuit, on top of issuing a patch for Word that it insisted would sidestep the alleged infringement. In May, however, the company's position was undermined somewhat when the U.S. Patent and Trademark Office confirmed the validity of i4i's patent, something that Microsoft spokesperson Kevin Kutz termed "disappointing."

Microsoft then asked the U.S. Supreme Court to hear its appeal. That request was granted, with Microsoft v. i4i Limited Partnership 10-290 due to be heard in early 2011.  

What's at stake with the case? Aside from a lot of money-i4i originally won a nearly $300 million judgment-any Supreme Court decision has a tendency to find itself used as a precedent in future cases; in that context, Microsoft's entanglement with a little Canadian firm could have wide-ranging repercussions for future intellectual-property suits.  

Piece of the Pie


 

Piece of the Pie

In many ways, the i4i case is also emblematic of how fiercely companies-big and small-will fight for a piece of multibillion-dollar markets. This was illustrated again during the summer, when Microsoft and Salesforce.com engaged in a round of tit-for-tat patent-infringement lawsuits.

Microsoft's initial lawsuit against Salesforce, filed in May, alleged that the cloud-computing company had violated nine of its patents. Salesforce fired back in June, insisting that Microsoft had violated five of its own patents. Salesforce CEO Marc Benioff-not exactly a shrinking violet among tech-company CEOs-publicly referred to Microsoft as a collective of "patent trolls" and "alley thugs."

Analysts saw the battle between the two companies as indicative of the growing competition over clients for cloud-based software.

"As you take a look at how the sundry vendors approach the cloud, they love to talk about interoperability and open platforms, but those open platforms come with a lot of inherent walls built around them," Charles King, an analyst with Pund-IT Research, told eWEEK in an Aug. 5 interview. "The fact of the matter is heterogeneity is a fact of life among the enterprise clients these vendors are trying to attract."

In other words, King added, "the dustup between Microsoft and Salesforce may be a portent of things to come, as the vendors work out their battles over who-owns-what and who moves ahead."

Those waiting for an epic battle between Microsoft and Salesforce-perhaps climaxing with a no-holds-barred wrestling match between Microsoft CEO Steve Ballmer and Benioff in a steel cage-were likely disappointed Aug. 4, when the two companies announced their mutual patent-infringement lawsuits had been settled out of court. "Salesforce.com will receive broad coverage under Microsoft's patent portfolio for its products and services as well as its back-end server infrastructure during the term," read a statement issued by Microsoft. "Also as part of the agreement, Microsoft receives coverage under Salesforce.com's patent portfolio for Microsoft's products and services."

Salesforce also agreed to compensate Microsoft for an undisclosed amount.

Android and Everything After


 

Smartphone Lawsuits

Microsoft also became more aggressive with manufacturers about intellectual property as it related to Android-powered smartphones. In April, HTC announced it would pay royalties to Microsoft in exchange for use of "patented technology" in its Android devices. Later in the year, Microsoft filed an intellectual-property lawsuit against Motorola, alleging the manufacturer's Google Android smartphones violated nine of its patents.

"The patents at issue relate to a range of functionality embodied in Motorola's Android smartphone devices that are essential to the smartphone user experience," Horacio Gutierrez, Microsoft's corporate vice president and deputy general counsel, wrote in an Oct. 1 statement, "including synchronizing email, calendars and contacts, scheduling meetings, and notifying applications of changes in signal strength and battery power."

Gutierrez added: "Motorola needs to stop its infringement of our patented inventions in its Android smartphones."

Microsoft's push into that Android-related area, of course, came as the company was ramping up to the release of Windows Phone 7, the revamp of its smartphone operating-system franchise and a direct competitor to both Android and the Apple iPhone. In theory, a cut of royalties from Android smartphones would profit Microsoft no matter which direction the mobile market takes. The fact that manufacturers such as HTC also build Windows Phone 7 devices, however, probably turns any legal discussions into a complex dance.

For its part, Microsoft seems to regard its lawsuit action as a consequence of a rapidly evolving industry.

"It is not surprising that at a time when there is an explosion of innovation in the technology industry-particularly in the rapidly evolving hand-held-devices space-there would be a frenzy of activity in both patent-related litigation as well as licensing," Microsoft's Gutierrez opined in a Dec. 17 statement e-mailed to eWEEK. "This is consistent with the pattern that has taken place in the past when new products resulting from technological convergence have entered the market and companies take steps to protect their inventions."

And there's more to come, Gutierrez wrote: "We expect 2011 to be an eventful year in the patent space and we are looking forward to it."

 


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