The case was tried in April 2006 in the notoriously plaintiff-friendly Eastern District of Texas, where a jury found that Microsoft had infringed two of z4 Technologies’ patents related to the prevention of software piracy.
In June of that year, z4’s request for a permanent injunction was denied based on the Supreme Court’s decision in eBay v MercExchange, marking the first case to invoke that precedent.
Software company Autodesk was also originally a defendant in the case, but agreed to an injunction.
The CAFC’s affirmance, published on November 16, preserved the jury’s damages award of $115 million, which was increased by another $25 million to a total of $140 million, for what the trial court deemed "litigation misconduct" based on the fact that Microsoft submitted 3,449 exhibits but admitted only 107 of them at trial.
Microsoft now owes a total of $178 million, including interest.
The company’s spokespeople were not available to comment last week, owing to the Thanksgiving holiday.
z4 Technologies is a privately owned company based in south-eastern Michigan. On its website, it claims to own 24 patents or patents pending with about 1,800 claims.
Two of these patents were upheld as valid and infringed in the litigation – method and apparatus for securing software to reduce unauthorized use (patent 6,044,471) and method for securing software to decrease software piracy (patent 6,785,825).
