Microsoft Ordered to Pay $120 Million in Patent Infringement Case

Strategic Insights -

A federal jury in Los Angeles has found Microsoft Corporation liable for patent infringement, ordering the software giant to pay $120 million in damages to Stac Electronics. The case centered on Stac's patented data compression technology used in Microsoft's MS-DOS 6.0 software. Stac's executives testified that Microsoft's use of their invention led to a significant increase in worldwide sales of the operating system. The company claims that Microsoft's use of the technology also protected its market share against competition from a similar system sold in Europe.

Key Takeaways:

  • Microsoft was found liable for patent infringement by a federal jury in Los Angeles, resulting in a $120 million damages award to Stac Electronics.
  • The case involved a disputed patent on data compression technology used in Microsoft's MS-DOS 6.0 software, which was released in 1993.
  • Stac's executives testified that Microsoft's use of their invention led to a significant increase in worldwide sales of the operating system.
  • Microsoft chairman William Gates highlighted the importance of the compression feature, stating that it was used by only two million users out of 100 million personal computers.
  • The jury decided the award based on royalties of $5.50 per unit of software sold.
  • Stac's data compression technology allowed users to free up more space on their computer disks by compressing data.

Statistics:

  • $120 million: damages awarded to Stac Electronics
  • $5.50: royalty per unit of software sold
  • 100 million: number of personal computers in use at the time of the trial
  • 2 million: number of users with data compression technology
  • 1993: release year of Microsoft's MS-DOS 6.0 software

Sources:

  • Reuters News Agency, Los Angeles CA
  • Microsoft Corp. records and statements
  • Stac Electronics press releases and testimony