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Microsoft accuses ex-employee of trade secret theft in case related to patent infringement action

By Lawrence B. Ebert, Esq.

Microsoft has charged former employee Miki Mullor with breach of contract, fraud, misappropriation of trade secrets and unjust enrichment related to Mullor's alleged theft of confidential documents unrelated to his job about technology that Microsoft offers to computer makers. The information in question allows end users to forego the Windows operating system activation process on PCs that come preloaded with the Windows software.

While Mullor was employed by Microsoft, Mullor's company, Ancora, filed a patent infringement suit accusing customers of Microsoft of infringing on a patent related to this technology. The customers were Dell, Hewlett-Packard and Toshiba, but because the technology in question was provided by Microsoft, the PC makers asked Microsoft to defend them against the claims.

See story on PCWorld.

A blog at the Seattle Post Intelligencer has a statement from Mullor:

I am the inventor of U.S. Patent No. 6,411,941 relating to software anti-piracy technology, and Ancora is my company. I applied for my patent in 1998. In 2002, the patent issued from the United States Patent and Trademark Office. In 2003, I approached Microsoft and had several discussions with a Microsoft lawyer and employees of Microsoft's Anti Piracy group about my invention and the benefits Microsoft could realize by using it. Microsoft declined and said they had no interest in my invention...

We ceased business operations at Ancora in 2005, and Microsoft was the first company to extend me an employment offer. I accepted... When I joined Microsoft, I notified them in writing of Ancora and my patent in both my resume and in my employment agreement. In its complaint against me, Microsoft withheld the portions of these key documents that show this.

At the same time I was employed at Microsoft, but unknown to me, Microsoft was developing what is now known as "OEM Activation." OEM Activation is installed on computers made by HP, Dell, Toshiba and others ... to prevent piracy of Microsoft's Windows Vista software installed on those computers. This work was being done in a different department at Microsoft. OEM Activation is a blatant copy of my invention...

In June 2008, my company Ancora filed a patent infringement lawsuit against HP, Dell and Toshiba in the federal court in Los Angeles. Microsoft fired me for trying to protect my own invention --- an invention I told them about before they ever hired me... Recently, Microsoft filed a retaliation suit against me personally in Seattle. Microsoft accuses me of lying, deceit, fraud and misappropriation.

These are shameful, dishonest attacks on my character by Microsoft ? the company that stole my idea in the first place. Their attacks are untrue, and they hurt me and my family. Microsoft basically admits stealing my idea in the complaint they filed because they are asking for a license to my patent. Microsoft would only need a license to my patent if they were infringing it in the first place. My patent case in Los Angeles has been going on for several months now with substantial progress. Clearly, Microsoft and the PC OEMs realized that they have no defense on the merits of the patent case.

Full post as published by IPBiz on January 31, 2009 (boomark / email).