A district judge has overturned a jury verdict that hit Microsoft with the world's largest ever patent damages.
Judge William Smith of Rhode Island said the jury didn't understand the implications when it found that Microsoft had wilfully infringed Uniloc's patent and ordered it to pay $388 million in damages back in April.
The suit was filed in September 2003 by California-based Uniloc, alleging that Microsoft has used its patent software activation technology in Windows XP and Office.
Uniloc claimed it had demonstrated its software to Microsoft in 1993 but that instead of licising it, Microsoft had developed an almost identical product. But Microsoft said that its system worked differently from Uniloc's, and that Uniloc's patent was "obvious".
In his decision, the judge said that the issues had been over-simplified. "Uniloc’s approach, both to the jury and now the Court, is to boil down complex computer software programs to a kind of generic word find puzzle, that ignores how the allegedly infringing system actually works and, most important, the actual disclosure in the ‘216 patent," he said.
As a result, he said, the jury lacked a grasp of the issues before it and reached a finding without a legally sufficient basis.
But there's more argument to come: Microsoft is making a counterclaim of inequitable conduct, and Uniloc is after supplemental damages.