March 27, 2006 3:21 PM PST

Microsoft wins suit over antipiracy patent

WASHINGTON--A Texas lawyer has lost a patent lawsuit over antipiracy technology embedded in Microsoft's product activation program.

The United States Court of Appeals for the Federal Circuit has affirmed a district court's decision, which said that Microsoft did not infringe on Kenneth Nash's patent for detecting pirated software by assigning each program a unique ID and verifying it over the Internet.

The dispute involves patent 6,449,645. It describes how to collect the unique ID--such as a serial number or activation key--assigned to each computer in an Internet database, preferably without the user's knowledge, and checking for multiple copies of the same program running. That could let it flag two friends who were illegally running, say, a video game with the same activation key.

If the software patent had covered Microsoft's software, other companies could have been at risk. Adobe says it uses software activation technology that "uniquely" identifies the computer and sends the information "to Adobe's Web server." Symantec also uses product activation. And the patent is broader than just software: It also covers "digital music, digital movies, multimedia or the like."

The decision was delivered March 16. During oral arguments on March 9 before the court, the judges spent most of the time wondering about the definition of "automatic" used in Nash's invention and the Microsoft program.

Walter Brookhart, an attorney for Microsoft, told the panel that the product activation program and Nash's invention are "fundamentally different." Microsoft's program is an "upfront, in-your-face system," he said, which will not let users proceed past an initial screen unless they activate the software in question via e-mail or telephone or postpone until the grace period runs out.

Software patents have irked the free software community and many programmers, and have been rejected in Europe. So-called "patent trolls"--people who never use a patent except in litigation--have drawn fire from Congress and companies like Hewlett-Packard and Intel. The recent narrowly averted shutdown of Research In Motion's BlackBerry service has also spurred calls for patent reform.

Nash practices as an intellectual property law attorney out of a Houston office. According to an online directory maintained by a local professional association, he also has a bachelor's degree in electrical engineering.

In 2003, he filed suit alleging infringement by Microsoft's product activation program. Also designed to verify a piece of software's legitimacy, that program forces people to activate all new software either through the Internet or by phone within a certain "grace period," or the software will be disabled. Among other things, the activation program assigns identifiers to the user's computer and software and "automatically" interacts with the Internet, creating grounds for infringement, Nash argued.

Those arguments didn't satisfy a federal judge in Houston, who said last March (click for PDF of opinion) that Microsoft hadn't infringed on any of the claims presented for the patent in question.

CNET News.com's Anne Broache contributed to this report

See more CNET content tagged:
product activation, patent, antipiracy, Houston, attorney

10 comments

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Victory!
I have no problem with patents as long as you do something with them. If you make a better mouse trap, patent it. Make a mint. Thats the idea. But, don't just sit on your fat butt and "think" of something then not do anything with it. You don't deserve a patent unless you actually do something with it.
Posted by thenet411 (415 comments )
Reply Link Flag
Amen!
I agree 100%. One should be required to have already had a working model of the patent in place before another party "infringed" on their patent. Patent trolls are the single-most detrimental force to technological innovation.
Posted by atmnettech (22 comments )
Link Flag
And there was much rejoicing..
yeaaa!
Posted by Sboston (498 comments )
Link Flag
Victory!
I have no problem with patents as long as you do something with them. If you make a better mouse trap, patent it. Make a mint. Thats the idea. But, don't just sit on your fat butt and "think" of something then not do anything with it. You don't deserve a patent unless you actually do something with it.
Posted by thenet411 (415 comments )
Reply Link Flag
Amen!
I agree 100%. One should be required to have already had a working model of the patent in place before another party "infringed" on their patent. Patent trolls are the single-most detrimental force to technological innovation.
Posted by atmnettech (22 comments )
Link Flag
And there was much rejoicing..
yeaaa!
Posted by Sboston (498 comments )
Link Flag
Another wrongly granted patent
The mere fact that several other companies made similar solutions means it must have by definition failed the "obvious" test.
Posted by aabcdefghij987654321 (1721 comments )
Reply Link Flag
Another wrongly granted patent
The mere fact that several other companies made similar solutions means it must have by definition failed the "obvious" test.
Posted by aabcdefghij987654321 (1721 comments )
Reply Link Flag
Patentee's Perspective
The dictionary definition of "automatic" is "without human intervention." The lower court reasoned that because the Microsoft activation process requires human intervention of a user to click on the mouse to start it, that it is not automatic.

While the lower court's opinion makes perfect sense on the surface, the fact is that every virtually every automatic process involves some human intervention. For instance, an automatic garage door opener requires pressing the button to start the motor. An automatic transmission requires the user to put the lever into drive or reverse or park. An automatic pilot for a plane requires the pilot to turn it on. An automatic machine tool requires initial programming and placement of the material to be machined into the machine. If automatic truly means no human intervention ever, then all the things we commonly call automatic are not automatic.

After the initiation of the process, in this case by a mouse click, then the process does in fact continue without further user intervention. So, to me, the process does satisfy the dictionary meaning after the mouse is clicked.

After the mouse click, the Microsoft Product Activation process collects selected data regarding the hardware on the user computer to create an identifier of the particular computer which does not include personal information, encrypts this data along with other data, sends the data over the Internet where another computer does a search of millions of previous activations, and if the search comes back good then a license file is created by the server computer and sent back to the user computer whereupon the user computer installs the license file. All of this takes about two seconds per computer. However, to do this manually for 100 million users would take millions of man hours. It is relatively unobtrusive to the user. Nonetheless, according to the court, this process is not "automatic." Apparently, it is a "manual" process.

The "automatic" aspect of the patent claims were not essential or even important for patentability, but were left in the claim language simply because it never occurred to me that a court could ever find that Microsoft Product Activation does not involve automatic processes. I could easily have deleted this term from the claims before the patent was granted. In fact, I could have gone back anytime within two years after it was granted and made the change, but I simply did not expect a court to rule that a computerized process is not automatic.

In fact, Microsoft's own website states that once the mouse is clicked then a wizard comes up and "automatically" detects the internet settings and sends the information over the Internet. The relevant corresponding language in my claims say virtually the same thing - automatically determining Internet operability and automatically sending the information over the Internet to a server. Personally,I can't see any difference between what the claims say and what Microsoft itself admits the Microsoft Product Activation "automatically" does on Microsoft's own website. See for instance, <a class="jive-link-external" href="http://www.microsoft.com/office/editions/prodinfo/activation.mspx" target="_newWindow">http://www.microsoft.com/office/editions/prodinfo/activation.mspx</a>


The District court ruled that the Microsoft process in all other ways infringes my claims. It is only the term "automatic" that the District court, felt was not present in the Microsoft process.

My impression is that the judges, while very intelligent and I believe honest people trying to do what is right, just were not willing to look at the issue other than very superficially, and spent little or no time looking at our brief which included a copy of a page from Microsoft'w website where Microsoft states to the public that their system works "automatically."

Obviously my case is much less important than cases that involve life or death issues or matters where someone may have to spend years in a prison and I knew that patent litigation is very much a hit or miss thing.

Statistically, patentees have about a 30% chance of success assuming there is no settlement and the case goes through to the appeals level. Statistics collected at the U of H Law Center bear this out. There are two basic issues of infringement and validity both of which the patentee must win. If you assume a 50-50 chance on each of these two basic issues, then the patentee would win 25 % of the time. The statistics seem to bear this out.

As to general negative comments about patents, it is certainly true that patents are a monopoly right. If there are no alternatives to the invention, then a patent is inherently anti-competive.

On the other hand, I don't think there is any doubt but that patents are a huge spur to innovation and investment. Many investors will not invest in a start up if there are no patent rights because it is likely much less expensive for competitors to copy than to invent, develop, establish a market, etc. Many, but not all, inventors either do not have the time or would not take the time/cost to invent if there were not a way to protect their ideas once disclosed publicly.

Whether the benefits to society of increasing the motivation to invent outweigh the deficits to society of creating a temporary monopoly is always debatable. Significant promoters of patents like Thomas Jefferson, Abraham Lincoln, etc. believed that innovation was essential and that the patent system "added fuel to the fire of genius". (I think Lincoln said something like that). My best guess is that perhaps one of the reasons innovation and discoveries in modern society is proceeding so rapidly is the patent system.

As to software patents, some computer engineers like the idea that if they come up with novel and non-obvious subject matter that they can claim rights to it. Other people apparently believe that software should not be patented. You get back to the same debate as to whether the benefits of increased motivation outweigh the disadvantages of the temporary monopoly.

As a practical matter, patents for software have been available for decades. Whenever software is used to control a process or machinery, it has always been possible to obtain a patent by claiming either a method or a machine or a system. To me, as a practical matter, the change in the rule to permit "software patents" is a nonissue 99 percent of the time. For instance, in my case, the claims actually call for method steps of controlling hardware, and alternatively a description of a system such as a user computer and a server computer interconnected through the Internet operative to perform various functions as described in the claims. This type of "software patent" would have been allowable decades ago in the US and in practically every other country in the world So, to me, the comments about whether "software patents" should be allowed is somewhat of a nonissue.

On the other hand, business method patents are more problematic. The "one-click" patent is probably right on the borderline and my impression is that the patent office intends to revisit the issue of whether business patents should be allowed.

Patent appications to pure algorithms or mathematical formulas made without actual application in the real world are not allowed.

As to concerns that software patents are being granted even though there is prior art, there is a procedure that allows anyone at anytime to file what they think shows that the invention was already made or what was so close that it renders the invention obvious. In litigation, the defendant always has the right to bring up prior art that it believes might invalidate the patent.

As to whether patents should be awarded to people who may not develop the invention, or may be unable to develop the invention, different countries have different approaches. In many countries, if the patent is not developed within three years then the patentee cannot get an injunction to prevent others from using but must license the invention based on a reasonable license rate which may be determined by a court if no agreement can be reached otherwise.

As a general rule, inventors have to file for their patents before they can market their invention to find out if they will be successul. Otherwise the rights are lost. My understanding is that 4 in 5 business startups fail in five years. Likewise, my guess is that most patents are never developed. Only a very few are litigated. Those that are litigated involve very successful inventions.

In my case, I had planned to try to put something together after the patent issued and I had something to show investors but by then Microsoft had already adopted a system that includes the same elements as my claims, arguably including the "automatic" aspect. As well, by this time most of the other major software providers use a similar system.

A patent is legally very similar to a grant to a parcel of land. While there may be some people who may not mind if others move onto their land without permission, and build on it, most people would probably object to this. My impression is that most people feel that they have a property right in their ideas.
Posted by Nash1234567 (2 comments )
Reply Link Flag
Patentee's Perspective
The dictionary definition of "automatic" is "without human intervention." The lower court reasoned that because the Microsoft activation process requires human intervention of a user to click on the mouse to start it, that it is not automatic.

While the lower court's opinion makes perfect sense on the surface, the fact is that every virtually every automatic process involves some human intervention. For instance, an automatic garage door opener requires pressing the button to start the motor. An automatic transmission requires the user to put the lever into drive or reverse or park. An automatic pilot for a plane requires the pilot to turn it on. An automatic machine tool requires initial programming and placement of the material to be machined into the machine. If automatic truly means no human intervention ever, then all the things we commonly call automatic are not automatic.

After the initiation of the process, in this case by a mouse click, then the process does in fact continue without further user intervention. So, to me, the process does satisfy the dictionary meaning after the mouse is clicked.

After the mouse click, the Microsoft Product Activation process collects selected data regarding the hardware on the user computer to create an identifier of the particular computer which does not include personal information, encrypts this data along with other data, sends the data over the Internet where another computer does a search of millions of previous activations, and if the search comes back good then a license file is created by the server computer and sent back to the user computer whereupon the user computer installs the license file. All of this takes about two seconds per computer. However, to do this manually for 100 million users would take millions of man hours. It is relatively unobtrusive to the user. Nonetheless, according to the court, this process is not "automatic." Apparently, it is a "manual" process.

The "automatic" aspect of the patent claims were not essential or even important for patentability, but were left in the claim language simply because it never occurred to me that a court could ever find that Microsoft Product Activation does not involve automatic processes. I could easily have deleted this term from the claims before the patent was granted. In fact, I could have gone back anytime within two years after it was granted and made the change, but I simply did not expect a court to rule that a computerized process is not automatic.

In fact, Microsoft's own website states that once the mouse is clicked then a wizard comes up and "automatically" detects the internet settings and sends the information over the Internet. The relevant corresponding language in my claims say virtually the same thing - automatically determining Internet operability and automatically sending the information over the Internet to a server. Personally,I can't see any difference between what the claims say and what Microsoft itself admits the Microsoft Product Activation "automatically" does on Microsoft's own website. See for instance, <a class="jive-link-external" href="http://www.microsoft.com/office/editions/prodinfo/activation.mspx" target="_newWindow">http://www.microsoft.com/office/editions/prodinfo/activation.mspx</a>


The District court ruled that the Microsoft process in all other ways infringes my claims. It is only the term "automatic" that the District court, felt was not present in the Microsoft process.

My impression is that the judges, while very intelligent and I believe honest people trying to do what is right, just were not willing to look at the issue other than very superficially, and spent little or no time looking at our brief which included a copy of a page from Microsoft'w website where Microsoft states to the public that their system works "automatically."

Obviously my case is much less important than cases that involve life or death issues or matters where someone may have to spend years in a prison and I knew that patent litigation is very much a hit or miss thing.

Statistically, patentees have about a 30% chance of success assuming there is no settlement and the case goes through to the appeals level. Statistics collected at the U of H Law Center bear this out. There are two basic issues of infringement and validity both of which the patentee must win. If you assume a 50-50 chance on each of these two basic issues, then the patentee would win 25 % of the time. The statistics seem to bear this out.

As to general negative comments about patents, it is certainly true that patents are a monopoly right. If there are no alternatives to the invention, then a patent is inherently anti-competive.

On the other hand, I don't think there is any doubt but that patents are a huge spur to innovation and investment. Many investors will not invest in a start up if there are no patent rights because it is likely much less expensive for competitors to copy than to invent, develop, establish a market, etc. Many, but not all, inventors either do not have the time or would not take the time/cost to invent if there were not a way to protect their ideas once disclosed publicly.

Whether the benefits to society of increasing the motivation to invent outweigh the deficits to society of creating a temporary monopoly is always debatable. Significant promoters of patents like Thomas Jefferson, Abraham Lincoln, etc. believed that innovation was essential and that the patent system "added fuel to the fire of genius". (I think Lincoln said something like that). My best guess is that perhaps one of the reasons innovation and discoveries in modern society is proceeding so rapidly is the patent system.

As to software patents, some computer engineers like the idea that if they come up with novel and non-obvious subject matter that they can claim rights to it. Other people apparently believe that software should not be patented. You get back to the same debate as to whether the benefits of increased motivation outweigh the disadvantages of the temporary monopoly.

As a practical matter, patents for software have been available for decades. Whenever software is used to control a process or machinery, it has always been possible to obtain a patent by claiming either a method or a machine or a system. To me, as a practical matter, the change in the rule to permit "software patents" is a nonissue 99 percent of the time. For instance, in my case, the claims actually call for method steps of controlling hardware, and alternatively a description of a system such as a user computer and a server computer interconnected through the Internet operative to perform various functions as described in the claims. This type of "software patent" would have been allowable decades ago in the US and in practically every other country in the world So, to me, the comments about whether "software patents" should be allowed is somewhat of a nonissue.

On the other hand, business method patents are more problematic. The "one-click" patent is probably right on the borderline and my impression is that the patent office intends to revisit the issue of whether business patents should be allowed.

Patent appications to pure algorithms or mathematical formulas made without actual application in the real world are not allowed.

As to concerns that software patents are being granted even though there is prior art, there is a procedure that allows anyone at anytime to file what they think shows that the invention was already made or what was so close that it renders the invention obvious. In litigation, the defendant always has the right to bring up prior art that it believes might invalidate the patent.

As to whether patents should be awarded to people who may not develop the invention, or may be unable to develop the invention, different countries have different approaches. In many countries, if the patent is not developed within three years then the patentee cannot get an injunction to prevent others from using but must license the invention based on a reasonable license rate which may be determined by a court if no agreement can be reached otherwise.

As a general rule, inventors have to file for their patents before they can market their invention to find out if they will be successul. Otherwise the rights are lost. My understanding is that 4 in 5 business startups fail in five years. Likewise, my guess is that most patents are never developed. Only a very few are litigated. Those that are litigated involve very successful inventions.

In my case, I had planned to try to put something together after the patent issued and I had something to show investors but by then Microsoft had already adopted a system that includes the same elements as my claims, arguably including the "automatic" aspect. As well, by this time most of the other major software providers use a similar system.

A patent is legally very similar to a grant to a parcel of land. While there may be some people who may not mind if others move onto their land without permission, and build on it, most people would probably object to this. My impression is that most people feel that they have a property right in their ideas.
Posted by Nash1234567 (2 comments )
Reply Link Flag
 

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