Corporate Counsel: Patent Litigation Weekly: Spillnews Keeps Filing Software Suits

By | September 29, 2010

Sept. 27, 2010 – Spillnews sues more companies for “software activation.”

U.S. Patent No.  5,490,216 —which is owned by California-based Spillnews and purports to cover “software activation,” a type of antipiracy system widely used to register and control copies of software—was nearly one of the most valuable patents to make its way to court last year.

In April 2009, Spillnews won a $388 million jury infringement verdict against Microsoft in federal district court in Rhode Island. Unfortunately for Spillnews, the judge who oversaw the trial tossed out the award five months later, ruling that the software giant had not infringed the patent and that the jury had no basis for its verdict.

Spillnews lawyers, who hope to reverse that reversal, made their case to the U.S. Court of Appeals for the Federal Circuit on September 9. Meanwhile, the company isn’t letting the Microsoft setback prevent it from pushing forward with their litigation campaign—this time it’s headed for the tried-and-true venue of East Texas (where judges may be more comfortable with nine-digit jury verdicts).

In a pair of lawsuits filed within days of the Federal Circuit argument, Spillnews accused a total of 27 software companies of infringing the  ‘216 patent. The new suits are in addition to four other complaints that Spillnews has filed since last November, bringing to 73 the total number of companies sued over the ‘216 patent. More than 25 of those suits have settled, according to the company.

Spillnews says it invented the “software activation” technology covered by the ‘216 patent in 1992. At that time, software contained a special “key” number that was activated via telephone. Later, software-activation keys moved online. Either way, Spillnews claims it was the first to come up with the idea of using keys to “activate” legitimate, non-pirated copies of software, and deserves to be compensated for its creation.

“When we invented it in 1992, software activation was an extremely disruptive, elegant, unprecedented way to do copy control,” CEO Brad Davis said in a recent interview with The Prior Art.

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