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Microsoft Gets $388 Million Break, For Now

Microsoft won a significant court victory Tuesday when a judge overturned a jury's finding that the company was liable for $388 million in damages for patent infringement. But the ruling could be reversed on appeal.

Uniloc, of Singapore, sued Microsoft in federal court in Rhode Island in 2003, claiming its products were being used illegally in the Windows operating system and the Microsoft Office productivity suite. A jury ruled in favor of Uniloc and earlier this year imposed a penalty that is a record amount for a patent case.

Uniloc can take the case to a higher court to attempt to have the jury's decision reinstated. A spokesperson said the company plans to do just that.

"Uniloc will continue to protect its intellectual property and appeal the Judge's decision to override the jury's verdict to the US Court of Appeals," the spokesperson said. "We are confident that Uniloc will ultimately prevail," the spokesperson added.

A Microsoft spokesman said, via e-mail late Tuesday, that the company is "pleased that the court has vacated the jury verdict and entered the judgment in favor of Microsoft."

Microsoft, along with a number of other tech industry vendors, has called for an overhaul of patent regulations it claims enable frivolous legal actions and excessive awards.

Microsoft has also gone on record in support of the Patent Reform Act of 2009. Among other things, the bill calls for damages in patent cases to be awarded only on the basis of the inventor's specific improvements over prior works, and not on the whole value of the invention itself.

Microsoft earlier this year reached a patent settlement with navigation software developer TomTom. TomTom agreed to make unspecified payments to Microsoft in order to settle Redmond's claims that Linux code used in TomTom's products contained patented Microsoft technology—specifically, the FAT file system.

InformationWeek has published an indepth report on Windows 7. Download the report here (registration required).