Microsoft Must Pay $140 Million For Using Multiple Passwords To Activate Its Software

from the patent-insanity dept

Wed, Nov 28th 2007 11:36am — Mike Masnick

Another day, another problematic patent ruling. Microsoft now needs to pay $140 million for violating a patent on using two or more passwords to protect against unauthorized use of a piece of software. Yes, someone actually got a patent on that idea. The company in question, Z4 Technologies, claims to be in the business of making DRM products, but the company's website only talks up its patents -- not any particular solutions. It doesn't appear to have anything for sale (or, if it does, it needs to hire a better marketing team). The website focuses on various ridiculous and easily-proven-false quotes about the so-called "losses" due to "piracy." Microsoft and Autodesk were the targets of the suit, which of course was filed in Marshall, Texas despite no one being anywhere near Texas. The judge in the original case sided with the patent holder and added a bonus of willful infringement against Microsoft. The latest ruling is from the appeal at CAFC, who appears to have kept the willful infringement finding, despite the standard for willful infringement changing. Perhaps Microsoft and Autodesk will start to realize that this is another ridiculous "cost" associated with pointless attempts at using DRM, and realize that its both cheaper and more efficient not to bother. Anyone want to calculate how much in "losses" such a DRM solution probably stopped vs. how much Microsoft now needs to pay?

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Filed Under: passwords, patents, software patents

47 Comments

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Anonymous Coward, 28 Nov 2007 @ 11:59am

Wow, an article about patents and DRM. If they could have just thrown in copyright, that would have been your triple crown!
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cost of doing business, 28 Nov 2007 @ 12:01pm

the amount microsoft needs to pay is surely nothing compared to what they stand to gain by working within the current patent system/process/landscape.
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Dick Manly, 28 Nov 2007 @ 12:04pm

Wha?
Something has got to be done about these patent racket companies. Am I the only person that thinks that there needs to be a change in patent law in the area of software development?
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- Anonymous Coward, 28 Nov 2007 @ 3:23pm
  
  Re: Wha?
  no, they need to make lots of changes in this area
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- gordo, 28 Nov 2007 @ 3:34pm
  
  Re: Wha?
  i agree. there should be no software patent laws whatsoever. The USPTO should negate all existing software patents and not allow any more.
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angry dude, 28 Nov 2007 @ 12:06pm

Mike's idiocy
Mikey, you would make a wonderful judge in all patent (and copyright) infringement cases

But seriously, dude, your ignorance of technology and law shows all over your shitty articles...

Better stay with PR and marketing, dude
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- angry dude's conscience, 28 Nov 2007 @ 12:15pm
  
  Re: angry dude's idiocy
  Dude, no I mean it, dude....dude..you are simply...well, dude, angry, predictable, and not very inventive, dude. You're also pretty dumb to repeatedly read a blog that you don't seem to like.
  
  BTW, since some of us are hip to your "anger", why don't you tell us what your wonderful patent is, again, dude.
  
  Better stay with trolling myspace or something because it won't work here, dude.
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  - B, 28 Nov 2007 @ 12:30pm
    
    Re: Re: angry dude's idiocy
    Oh, burn.
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- Tired, 1 Dec 2007 @ 9:27am
  
  Re: Mike's idiocy
  I think you have a syntax error, it reads "ignornat technology law" currently in place.....not how it's viewed currently, Mile isn't quite as ignorant as he shows the common citizen thought of, these companies and the laws they BUY, are ignorant of what their consumers want.
  
  If that's ignorant by the terms of ignoring ridiculous laws that only help the few, then yes, count us all in for the most part, take a look around you...I hate to bring up the simpsons but if lawyers are/were snakes....it's about time for snake whacking day.
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Jeff, 28 Nov 2007 @ 12:14pm

.
And in related news, I just obtained a patent on making the sun come up. You all owe me lots and lots of money. I think. Maybe. Either way, my lawyers need to get paid, so I'm gonna try and hire the entire insight community to tally the total for me.

This is yet another glaring example of how badly we need patent reform in this country. Hell, maybe not even reform so much as a committee dedicated to imposing sentences of public live-on-the-today-show-bare-assed-spankings for all of these dickhead patent trolls. GTFO.
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- little dickhead patent troll, 28 Nov 2007 @ 12:30pm
  
  Re: .
  "public live-on-the-today-show-bare-assed-spankings for all of these dickhead patent trolls"
  
  Wonderful idea, dude
  
  lets start with IBM's CEO, then goes HP, MS etc. etc. etc.
  
  Or you wanna spank just the little ones, dude ?
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  - Anonymous Coward, 28 Nov 2007 @ 1:56pm
    
    Re: Re: .
    I'll spank the hot ones! (If there are any.)
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    - angry dude, 28 Nov 2007 @ 2:04pm
      
      Re: Re: Re: .
      What, are you gay, dude ?
      
      Never heard of female trolls
      
      To be a troll is a manly thing...
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      - Anonymous Coward, 28 Nov 2007 @ 2:08pm
        
        Re: Re: Re: Re: .
        If there are no female trolls, how do they reproduce, hmm?
        [ link to this | view in chronology ]
        
        Anonymous Coward, 28 Nov 2007 @ 2:24pm
        
        Re: Re: Re: Re: Re: .
        Trolls get so large and bloated with their ego and garbage blood that they just split in two. Like a single cell organism
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        Anonymous Coward, 28 Nov 2007 @ 8:35pm
        
        Re: Re: Re: Re: Re: Re: .
        Well if they are asexual, then desire to spank one does not indicate homosexuality.
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The Dude, 28 Nov 2007 @ 12:34pm

Dude, Where's My Patent?
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brwyatt, 28 Nov 2007 @ 12:37pm

wtf...
Will they just fire the judge already? Or better yet, sue him in his own court for willful infringement... with him as judge, and see how he rules then! (probably against himself!)...

When will people finally start THINKING?
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- angry dude, 28 Nov 2007 @ 1:20pm
  
  Re: wtf...
  Didn't they teach you not to insult federal judges, moron ?
  
  And this was a jury trial, BTW
  
  Take a shit and relax, abortion victim
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Seth, 28 Nov 2007 @ 1:23pm

crazy
Oh ya, I have a patent on submitting comments online, so you all owe me some mula, he he.

Lame as heck that some company can make that much off of a computer process.
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- angry dude, 28 Nov 2007 @ 1:31pm
  
  Re: crazy
  "Lame as heck that some company can make that much off of a computer process"
  
  Heck, you are right, dude !
  
  Let MShit return all the shitloads of money (500 Billion ?? A trill ?) they made on their shitty buggy computer process called Windoze
  
  Hey, Billy Gates, techdirt has spoken
  Give us our money back
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Old Guy, 28 Nov 2007 @ 1:24pm

You all think small
I just took out a patent on the idea of patents
AND
I also copyrighted the terms patent, infringement, piracy and copyright.

The entire world will be hearing from my attorneys...

muhahahaha (yep copyrighted that too)

hehe
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- Bigger, 28 Nov 2007 @ 2:07pm
  
  Re: You all think small
  They think too small? I just copyrighted the alphabet and patented "written symbols called 'letters' ... combining 'letters' to make 'words' ... combining these 'words' into 'sentences' ... combining 'sentences' to make 'paragraphs' ... combining 'paragraphs' to make 'literature'."
  
  Now who's thinking small?
  
  HAHAHAHAHAHAHA!!!!!!111!!!1!!1!1
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Carme, 28 Nov 2007 @ 1:34pm

This is not a DRM issue
It's silly to characterize patent harassment as an additional cost of implementing DRM, because it's also an additional cost of doing anything else. Implementing DRM doesn't widen your exposure to frivolous patent infringement charges any more than developing any other kind of product or feature.

As for claiming that putting complex activation schemes for software is "pointless", I think your mistake is thinking it's supposed to solve the piracy problem which is wrong. It's meant to prevent loss of profits from people - usually businesses - that would never consider right out pirating software but need that extra push to actually pay in some situations. For example:

1. A worker's computer with Software X is replaced with a new one and the old machine goes to some other employee that doesn't use Software X. The software is installed on the new machine with the legitimate assumption that the license is now used there and there's no reason it will be used on the old computer. Later, the other employee discovers she needs to use Software X herself, and finds out it's already on the machine so she starts to use it.

2. A new guy is coming and IT need to quickly set up a machine for him, so they use the software discs lying around with the full intention of buying additional licenses later. However with time it is forgotten as more important things come up, so the additional licenses are not bought eventually.

And so on. Also, the harder it gets to use unlicensed software, the easier it is to prove willful infringement in court.

I don't know if it actually makes sense in the bottom line, but I certainly wouldn't dismiss activation schemes as "pointless".
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Anonymous Coward, 28 Nov 2007 @ 1:45pm

I implemented this system in some software I worked on professionally two years ago. I implement novel and crazy ideas in software every day. I never check for patents first.
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Joe, 28 Nov 2007 @ 1:46pm

I doubt MS will have to actually pay this
Not that I approve of DRM as it really harms the consumer more than it helps any company other than DRM creators. But most likely MS will appeal and win and may even get their money back from legal fees from the other company, or just sue the patent system.
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- angry dude, 28 Nov 2007 @ 1:51pm
  
  Re: I doubt MS will have to actually pay this
  Another abortion victim...
  
  This WAS an appeal
  
  Sue the patent system ? How do you do it, dude ?
  Seriously, I wannna do it myself for a long time
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  - angry dude's conscience, 28 Nov 2007 @ 2:42pm
    
    Re: Re: I doubt MS will have to actually pay this
    "Another abortion victim..."
    
    Yes, we know you're an abortion gone wrong but don't be so down on yourself.
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josh, 28 Nov 2007 @ 1:49pm

you're right!
patents are kinda rediculous. now that that is settled, what do YOU propose we do about it, since you do seem to complain a lot about how nothing is getting done.

if YOU have a solution, let's hear it. otherwise, whats the point of complaining again and again and again?
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- angry dude, 28 Nov 2007 @ 1:55pm
  
  Re: you're right!
  Dude, you must be new here..
  
  What Mike proposes is that you should distribute your songs (music, books, patented inventions etc.) for free and make money on selling T-shirts instead...
  
  Hillarious
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  - ehrichweiss, 28 Nov 2007 @ 2:39pm
    
    Re: Re: you're right!
    Seeing as how I toured with a band that had a local following where each member netted about $78k doing exactly that, selling tshirts and doing gigs 5 nights a week, that's exactly what they should do instead of waiting on an eensy-meensy royalty check or listening to your asinine comments.
    
    Are you some form of shill for the *AA's and big corps or something? I only ask because for someone who complains about being screwed over on your "awesome patent", one would figure that you'd want less punishment, not more of it.
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    - ehrichweiss, 28 Nov 2007 @ 2:41pm
      
      Re: Re: Re: you're right!
      That should read: "$77k per year".
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      - ehrichweiss, 28 Nov 2007 @ 2:43pm
        
        dammitRe: Re: Re: Re: you're right!
        $78k per year
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        erichweiss's calculator, 28 Nov 2007 @ 8:38pm
        
        Re: dammitRe: Re: Re: Re: you're right!
        no, 77. No wait, 78, maybe it was 79, AHHHHH!!!!!! *explodes*
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Upshot Uranus, 28 Nov 2007 @ 2:17pm

This is simply a fine example of what goes around comes around. Microsoft started patenting everything they could, and they got caught using an idea they weren't first to patent. How poetic.
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- norman619, 28 Nov 2007 @ 3:47pm
  
  Re:
  So just because it's MS it's OK? Sorry but it's WRONG no matter how you look at it.
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  - Anonymous Coward, 28 Nov 2007 @ 3:59pm
    
    Re: Re:
    so since when are monopolies ok?
    
    any other company id be pissed but with ms i laughed, as for autodesk, im a little miffed at that
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Anonymous Coward, 28 Nov 2007 @ 2:19pm

Anyone patented the use of the word "fuck" yet?
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WYatt, 28 Nov 2007 @ 2:22pm

I think angry dude is related to one of the industries Mike has been bashing lately (deserved). I have no problem with it myself, even if I had personal involvement with one of these companies. Mike is stating an opinion, not fact, and a lot of you are getting really pissed off. It's an OPINION! We all have them, some maybe less stupid then others. What’s with "DUDE" anyway? Did we somehow revert back to 1995 while I wasn’t looking?
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dm, 28 Nov 2007 @ 2:26pm

I've patented the word "dude". Angry dude you better watch your p's and q's buddy.
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Sean, 28 Nov 2007 @ 3:19pm

Would this not also apply to any websight that when you create a username and password(1) and have to type the activation code (password 2) from the little picture on the to verify that you are not a bot.

That is 2 passwords and if there is a confirmation link sent to your email that is a one time password(3) entered automatically.

This is done on some web forums to prevent unauthorised activation of the account that acceses a web app. The app is software running on the server that displays the out put to the user at a different location.

"using two or more passwords to protect against unauthorized use of a piece of software"
it fits
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Smart Thinker, 28 Nov 2007 @ 4:39pm

I have an Idea
Why don't we patent an obvious idea and then sue when someone else comes up with the same idea? We could pick up several million dollars without really doing anything!
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Alfred E. Neuman, 28 Nov 2007 @ 4:48pm

Deadbolt
Adding a deadbolt to your door which already had a lock in the doorknob seems to be prior art, no ?
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- Anonymous Coward, 28 Nov 2007 @ 5:59pm
  
  Re: Deadbolt
  as long as they both use different keys like a car with one key for the door and one for the ignition
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Bryan, 29 Nov 2007 @ 1:39am

Carme is right
Conflating this patent thing with DRM is silly. Patent trolling is nothing new; the fact that both the patent troll and Microsoft are in any way associated with DRM is beside the point.

Also, Mike, MS offers DRM enforcement support in its OS's through no need to protect themselves from piracy; their WGA isn't DRM in the classic sense we think of it. No, MS includes the ability to sense DRM'd media and either not play it or fuzz the playback as a way of making it attractive for other companies to release music/movies/whatever in forms that will play on Windows. So DRM is just a capability of Windows; one which (marginally perhaps) increases the value of Windows to users. Imagine Jane Soccermom with a choice of two computers: one that can play her DRM'd movie, and one that cannot. Which will she choose?

So in this case MS is profiting (if only slightly) from DRM whether it is used or not. Aim your anti-DRM anger at those who deserve it: the media moguls who insist on wrappping music/movies/books/whatever in DRM protections. In the case of DRM for these types of content, Microsoft is no more evil than Phillips, Samsung, Panasonic, et al (they all make DVD players which enforce region-encoded discs).
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Killer_Tofu (profile), 29 Nov 2007 @ 6:02am

DRM & Patents
DRM wrapped right into Vista is another reason I shall NEVER use it. M$ and Billy G may want to go down to hollywood, bend over, and ask for it, but I will not join them. I will not allow some OS to tell me what I can and cannot play when and where. Phuk that.

And my opinion on patents for software is the exact same as Gordo in post #36:
All software patents should be instantly invalidated, and no future ones allowed.
Hell, it'd probably be better if we did that for all technology. Imagine how fast it would progress then with no patents to slow it down.
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Sharingislegal, 29 Nov 2007 @ 9:33pm

Happy
I'm just happy M$ is tasting it's own medicine. :)
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