Uniloc, Microsoft settle copy protection patent case

A company founded by an Australian inventor, Uniloc, has negotiated to receive a settlement from Microsoft in a long-running patent battle covering a software activation method

A company with Australian roots has negotiated to receive a settlement from Microsoft in a long-running court battle over a software activation patent.

Uniloc, a copy protection company founded in Australia in 1992, has agreed to drop the case in exchange for a confidential settlement.

Uniloc initially won a $388 million jury award in the case, but this decision was overturned in January last year by a US appeals court, and sent back to a lower court for a retrial.

The case related to a US software patent covering methods to restrict software from running unless activated with a license key. The patent was awarded to Australian inventor and Uniloc founder Ric Richardson in 1992.

Uniloc first sued Microsoft in 2003, alleging that it had approached Microsoft about licensing its software activation system in 1997, and that Microsoft had declined but then introduced a similar system in Windows XP which infringes on the patent.

The case was thrown out by a Rhode Island court in 2006, but an appeals court reversed the decision in 2008.

IMF Australia (ASX:IMF), a litigation funding company helping to finance Uniloc's patent enforcement actions, said in an ASX statement on Tuesday that more court action is on the way.

“Uniloc now intends to pursue numerous other cases against alleged infringers of its patent,” the statement read.

Uniloc has already sued at least 73 companies for alleged infringement of the patent, including Sony America, McAfee and Activision, and has negotiated at least 25 settlements.

IMF Australia said it will receive proceeds from this and other settlements that have occurred of around $9 million.

The company, which provided $5 million to Uniloc to support the appeals court case, has arranged to receive a cut of the proceeds from damages, settlements and license fees until the total payment reaches $30 million.

Follow Computerworld Australia on Twitter: @ComputerworldAU

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