Lawyers: Microsofts FAT Patent Defeat Significant

Some lawyers believe Microsoft's FAT patent defeat is a significant one that may lead to customers suing the software giant.

How significant is the U.S. Patent and Trademark Offices initial rejection of Microsofts FAT (file allocation table) file system patent claims?

Is it, as a Microsoft representative describes it, "one step in a long process"? Or has the patent office "simply confirmed what we already knew for some time now: Microsofts FAT patent is bogus," as Dan Ravicher, executive director at PUBPAT (Public Patent Foundation) describes the decision?

/zimages/3/28571.gifWould revoking Microsofts FAT patent stir innovation? Peter Coffee weighs in.

The IP (intellectual property) attorneys spoke with are siding with PUBPAT: This was a significant defeat for Microsoft.

"PUBPATs victory is a shot across the bow for companies that are using illegitimate patents to obtain undeserved licensing fees and a warning to companies that agree to such licenses by assuming that all issued patents are enforceable," said Allonn Levy, an attorney with Hopkins & Carley in San Jose, Calif.

Glenn Peterson, an IP attorney and shareholder with Sacramento, Calif.-based law firm McDonough Holland & Allen, agreed. "No matter how you slice it, the patent offices rejection of the 517 [FAT patent] claims is a huge victory for PUBPAT and potential pandemonium for Microsoft. It is truly a David versus Goliath victory for PUBPAT," he said.

"At best, it is a significant embarrassment to Microsoft. At worst, Microsoft may have a battery of angry licensees to deal with," said Peterson.

"Licensees will, of course, want their money back, since they apparently paid Microsoft for rights it did not possess. If Microsoft is uncooperative with disgruntled licensees, litigation will surely follow," he predicted.

Levy agreed that Microsoft might face angry licensees. "It will be interesting to see how Microsofts licensees will react to this action by the PTO."

"Clearly, after the debacle earlier this year with the lawsuit against Lindows, in which Microsoft paid $20 million to settle to avoid the risk of having its valuable Windows trademark invalidated, Microsofts IP department is having a bad season," Peterson said.

This patent defeat was also an unusual one. "While it is true that the re-examination process can be cause for the [PTO] to declare a patent invalid … the re-examination process is infrequently used," said Robert Krebs, IP attorney and partner in the San Jose office of Thelen Reid & Priest LLP.

"In 2003, for example, about 190,000 patents were issued, but only about 400 requests for re-examination were filed," said Krebs. But, "of those, about 380 requests were granted."

Ravicher agrees. "This is unusual only because re-examination of patents is a rare proceeding." That said, "it is not, however, unusual for a software patent to be proven invalid. We can expect to see more re-examinations and more invalidation of software patents in the future."

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