Technology: Will patent challenge stymie software giant?
By BARRY FOX Microsoft, the world’s largest software company, has grand plans for a worldwide launch this month of a new version of its MS-DOS operating system, upon which almost all IBM-compatible personal computers rely. But its plans may be thwarted by the small Californian company Stac Electronics, which has sued Microsoft for infringement of its patents. MS-DOS 6 will contain a data compression system called DoubleSpace which doubles the amount of data that can be stored on a computer’s hard disc. But Stac already sells a data compression system called Stacker, which computer owners can use with existing versions of MS-DOS. Stac is asking the Central District Court in Los Angeles to stop Microsoft infringing two patents and to pay treble damages and costs. This could stop Microsoft putting MS-DOS 6 on sale early in April, as it plans. Microsoft refuses to discuss the case, but there are signs of the company’s concern. A computer consultant claiming to be acting for Microsoft has put messages on electronic bulletin boards asking computer users for information to help defeat Stac’s action. Microsoft would neither confirm nor deny any connection with the consultant. Every computer needs an operating system to control its basic functions, such as moving data from hard disc to solid-state memory. Microsoft designed MS-DOS specifically for IBM personal computers, and more than 100 million IBM and compatible computers now use it. As an incentive for people to buy a new version of MS-DOS, Microsoft decided to build data compression into MS-DOS 6. There are already several data compression programs available, and Stac’s Stacker is one of the most popular. Since 1989, Stac has grown from a company with 25 employees and a revenue of less than $1 million to a 200-strong company with revenue of $150 million. But if data compression is built into the operating system, people will no longer need to buy systems such as Stacker. Stac says that in 1991, Bill Gates, the founder and head of Microsoft, asked Gary Clow, Stac’s president, about including Stacker technology in MS-DOS. Negotiations between the two companies broke down, restarted and stalled again several times during 1992. Stac eventually pulled out and now claims that Microsoft refused to pay Stac ‘reasonable compensation’ for using Stacker technology in MS-DOS 6. Stacker takes advantage of the fact that all computer files contain redundant information, such as the repeated use of the same characters, which could be abbreviated. Stac has examined a prototype of MS-DOS 6 and claims that although DoubleSpace may vary slightly from Stacker, it still infringes its two US patents, 4 701 745 and 5 016 009. The first was filed by John Waterworth of the British company Ferranti but is now owned by Stac. In the bulletin board messages, the consultant says he is ‘completely convinced of the patent’s triviality’ and that it is ‘ludicrous’ that the patent was ever granted. The consultant warns that the stakes are high: if Microsoft wins, the patents will be worthless; if a company as large as Microsoft loses, then it is unlikely the patent will be challenged again and it will be hugely strengthened. The patent describes the idea of searching data for sequences of bytes which are identical to sequences that have already been processed, and then storing only an abbreviated code identifying the location of previously stored identical sequences. While this may seem an obvious technique to computer programmers today, Microsoft must prove that it was obvious when Waterworth filed his application in March 1985. If Microsoft can prove that it was a trivial idea in 1985 or that the idea had already been published or used, Stac’s claim will not hold up. The bulletin board messages ask for any information on publication or use of the idea prior to 1985. The messages have now been deleted. Stac hopes to convince the court in Los Angeles that because Microsoft approached Stac for a licence to use its technology,