Trial misconduct costs Microsoft $25 million in patent suit

Microsoft and Autodesk have both been ordered to pay damages to z4 over the use of a piece of anti-piracy technology on which z4 has a patent. Microsoft's $115 million bill has been increased to $140 million, while Autodesk has been ordered to pay $18m.

Microsoft had argued that the patents were unenforceable and that a new trial should have been conducted, but instead was punished by Judge Leonard Davis in the Court of the Eastern District of Texas who accused the company of misconduct in the trial and of attempting to overwork the court and mislead the jury.

Judge Davis detailed four areas where he said Microsoft had engaged in trial misconduct. He said that the company tried to withhold evidence, to bury its defence exhibits under a mountain of evidence and that it attempted to mislead z4 and the court.

He detailed how an "unprecedented" 3,499 exhibits were listed in its defence, but how only 107 were used. The list of exhibits alone constituted a 283-page booklet.

"The court concludes that defendants attempted to bury the relevant 107 exhibits admitted at trial in its voluminous 3,449 marked exhibits in the hope that they could conceal their trial evidence in a amassive pile of decoys," Davis wrote in his judgment.

"This type of trial tactic is not only unfair to z4, but creates unnecessary work on the courts staff and is confusing and potentially misleading to the jury," wrote Davis.

"Microsoft’s behavior as a party to this case constitutes litigation misconduct making this an exceptional case," he wrote. "While the Court is not aware of any direct motivation on the part of Microsoft to harm [z4 owner David] Colvin, there is ample circumstantial evidence that to Microsoft Colvin and his patent rights were insignificant because Microsoft never thought Colvin would be able to pursue his rights against it. The evidence presented at trial suggests that Microsoft considered z4 a small and irrelevant company that was not worthy of Microsoft’s time and attention, even if Microsoft was potentially infringing its patents. Microsoft might well have taken z4 seriously had z4 been a large and more established company."

Following a recent US Supreme Court precedent, Microsoft was told earlier this year that it did not have to stop using the z4 technology even though it had infringed z4's patent. The court ruled that as long as it paid z4 it could continue to use the product registration technology.

Microsoft and Autodesk had requested a new trial in the case but were denied that request. The award of damages is the second largest Microsoft has faced in a patent case. The largest was $521m and was awarded in favour of Eolas in 2003. Microsoft is appealing that case and recently won the right to have a new judge hear that case.