Patent ruling causes ripples

New Zealand programmers look to be safe from a Washington court ruling which threatens Microsoft SQL Server developers worldwide, although those who've done work for overseas markets could be liable.

New Zealand programmers look to be safe from a Washington court ruling which threatens Microsoft SQL Server developers worldwide, although those who've done work for overseas markets could be liable.

The judgement covers a licensing agreement between Microsoft and Washington-based Timeline, which allowed Microsoft to use Timeline’s patented technology in SQL Server 7.0.

The Washington Superior Court of King County found that the 1999 licensing agreement limits Microsoft’s ability to “sub-license” the patented technology to developers, partners and ISVs.

Now Timeline is claiming that developers who used the technology could be liable to pay it licensing fees.

Intergen head Tony Stewart says the Wellington software developer has been looking carefully at the case.

The technology in question relates to the design and use of data marts and data warehouses and is protected by three US patents held by Timeline.

“On the face of it, it looks like it does affect us but it’s difficult to determine what that impact would be until we get some analysis done,” Stewart says.

Intergen has done work for customers creating data warehouses and OLAP cubes.

However, Simpson Grierson intellectual property partner Earl Gray says New Zealand developers would only be affected if Timeline had taken out patents in New Zealand.

An initial search revealed that no patents had been taken out in New Zealand under the name of Timeline, although the company could have done so under another name.

“Every patent is territorial and the ones they’re talking about are for the US only. Not everyone would bother to get a patent in New Zealand,” says Gray.

However, Timeline does claim to have interests in Australia. Gray says New Zealand developers who have done work there or in other overseas markets covered by Timeline patents would have to assess their risk.

The dispute goes back to 1999 when Microsoft asked the Washington court to affirm that under the terms of the licensing agreement with Timeline, Microsoft’s customers and partners are entitled to sub-license Timeline’s patented technology at no charge to develop their own applications.

In Microsoft’s interpretation of its licence with Timeline, published in a press release at the time, “all users of Microsoft SQL Server 7, Office 2000 and other Microsoft products that utilise this type of technology are unencumbered by Timeline’s patents”.

Timeline had a different interpretation of the licence. It argued that at the time the agreement “clearly distinguishes between users of Microsoft products who may employ Timeline technology, and certain third-party software developers to whom Microsoft may not sub-license”.

The recent judgement confirmed that Microsoft’s right to sub-license Timeline’s technology was “substantially limited” and means that some SQL Server users may be liable to pay Timeline for use of its new technology, according to Timeline.

Timeline says a licence to its technology ranges from $US250,000 to $US5 million, depending on the size of the licence and how the technology is used. Gray says it comes down to whether developers are potentially infringing the patent. That depends on the scope of the monopoly granted by the patent -- does it cover anything which an SQL developer might do; and whether that monopoly is a valid monopoly having regard to what was around at the time that the patent was applied for. If it is very broad there will be some question over whether that broadness is appropriate.

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