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Microsoft Loses Office Patent Appeal

The case may represent the first time Microsoft has updated its software for purely legal reasons.
Microsoft lost a federal appeal in a case that said Microsoft violated a Guatemalan inventor's patents, lawyers for Carlos Armando Amado said Friday.

The original verdict, which was handed down by federal court in 2005 in favor of Amado, was upheld by a U.S. Court of Appeals, said Vince Belusko, a partner of the San Francisco firm of Morrison & Foerster, in a statement.

"This ruling signals the validity of the patent and confirms Microsoft's liability of infringement on Mr. Amado's software program," added Belusko, the lead attorney in the case. "We are hopeful that the District Court will now award Mr. Amado substantial monies from that escrow account when the matter is returned to the court."

In 2005, Microsoft was told to pay Amado $6.1 million for violating Amado's patent, which covered technology to link spreadsheets and databases. Amado developed the technology while at Stanford University, and patented it in 1994.

The 2005 ruling had stayed an injunction against using the technology pending appeal, but had ordered Microsoft to put into escrow money to cover sales of additional infringing products. Currently, said Belusko, that escrow account contains over $65 million.

Last week's ruling rejected appeals by both Amado and Microsoft, and returned the decision on how much of the escrow account should be awarded to the lower court.

Since the 2005 decision, Microsoft issued a patch for Office XP and Office 2003 that stripped out Amado's technology.

It was the first time that Microsoft had updated its software for purely legal reasons.

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