14 DAY TRIAL // Microsoft has filed a complaint, accusing an ex-employee of fraud and misappropriation of trade secrets. The software giant claims that he accessed confidential documents without authorization, which his own company then used to sue Dell, Toshiba and HP for patent infringement.
Miki Mullor is the founder and current CEO of Ancora Technologies, a software development company he incorporated in 2004. Mullor is the inventor of U.S. Patent No. 6,411,941 issued by the United States Patent and Trademark Office in 2002, called "Method of Restricting Software Operation Within a License Limitation." The technology has the purpose of combating software piracy.
In 2005, Mullor applied for a job at Microsoft, and was hired as a program manager in the Windows Security Group. The company headquartered in Redmond, Washington, claims that Mullor falsely stated in his job application that Ancora was no longer in business, while he was still its CEO.
The company fired Mullor in September 2008, after Ancora filed a suit against Dell, Toshiba and HP for illegally using its patented technology. Microsoft became an involved party in the patent lawsuit, because it provided the vendors with the technology it was being sued for.
The software giant alleges that Mullor illegally downloaded documents containing its trade secrets to his company-issued laptop, and then tried to cover his steps. Microsoft maintains that it has found traces of the said documents on his portable computer, and that it has proof that Mullor was planning the patent lawsuit since before he became its employee.
In his defense, Mullor has released a written statement (PDF), in which he denies the accusations. First of all, he says that he tried to sell his invention to Microsoft in 2003, when he had several meetings with the company's lawyers and several employees from its Anti Piracy department, but his offer was declined.
Furthermore, he points out that Ancora really did cease business operations before he got hired by the Redmond giant, and that he notified it about his patent in his resume. "In early 2006, I moved my family to Seattle from Los Angeles, bought a house and focused on my new career at Microsoft. I enjoyed my job very much, and Microsoft commended my work and even promoted me," Mullor writes.
That was until he found out about the OEM Activation technology developed by Microsoft to protect its Windows Vista operating system from piracy. "This work was being done in a different department at Microsoft. OEM Activation is a blatant copy of my invention. In fact, the same Microsoft person that I explained my invention to back in 2003 was involved in the development of OEM Activation," Mullor reveals.
Through this lawsuit, Microsoft is also seeking a royalty free license to the patent, which Mullor qualifies as an admission of guilt. "Microsoft would only need a license to my patent if they were infringing it in the first place," he explains.
It will be interesting to see the outcome of this patent case, but we will have to wait for more than a year, as it is scheduled for trial on 26 January 2010. Meanwhile, Mullor is very passionate and optimistic as far as his chances are concerned. "Microsoft’s complaint against me in Washington is a shameful and a desperate attempt to put pressure on me and my family from continuing to pursue our legal rights in the federal court in Los Angeles. We will not stop until the truth comes out. We are ready to take the stand for all other inventors and entrepreneurs and tell Microsoft: 'no more.'," he concludes in his statement.