Microsoft loses FAT patent, wins Smart Tag case

Microsoft Corp. is fighting a rejection by U.S. patent authorities of a patent for its FAT (file allocation table) file system, the company said Thursday. Meanwhile, it's celebrating a jury decision clearing it of patent infringement charges related to a feature in its Office software.

After re-examination, the U.S. Patent and Trademark Office (PTO) earlier this month rejected a 7-year-old Microsoft patent for the FAT file system. The patent, which Microsoft started licensing to third parties in December, was contested by a small New York group that argued other patents already covered the technology.

The Public Patent Foundation on Thursday said its appeal to the PTO had been successful and that the 5,579,517 patent was ruled invalid. "The patent office has simply confirmed what we already knew for some time now: Microsoft's FAT patent is bogus," Dan Ravicher, the organization's executive director, said in a written statement.

Microsoft was granted the patent in November 1996, but the file system covered by it has been in use since the 1970s. The FAT file system is used in computers and devices such as digital cameras and detachable storage media. Lexar Media Inc., for example, has licensed Microsoft's FAT technology for use in its memory cards.

"I hope those companies that chose to take a license from Microsoft for the patent negotiated refund clauses so that they can get their money back," Ravicher said. Other companies that have signed license agreements with Microsoft for the technology include Rockwell International Corp., Creative Technology Ltd. and Seiko Epson Corp., according to Microsoft.

Microsoft contends that the PTO's decision has no bearing on the licensing program at this time, a company spokesman said. The software maker plans to appeal the decision and believes that the patent office will find its patents valid, the spokesman said.

"The PTO has not revoked the patent, it has simply put the claims in question and requested that Microsoft provide arguments supporting our initial claims or amending our claims. We are looking forward to having our first opportunity to weigh in with Microsoft's side of the story," the spokesman said.

While Microsoft is fighting the PTO, a two-week jury trial in Providence, Rhode Island, has ended with a decision in its favor. The jury found that Microsoft's Office Smart Tags feature does not infringe on the 6,323,853 patent granted in 2001 to Norwegian Atle Hedloy of Arendi Holdings.

The specific Smart Tag feature in question recognizes when a user types the name of a person in a Word document. Once the name is recognized, the user can select a Smart Tag icon and then choose among options to create a new contact in Outlook, send an e-mail message to the person, or look up the person's address from Outlook.

Hedloy sued Microsoft in 2002. The patent is for a method "whereby a single click on the function item in a window or program on a computer screen, or one single selection in a menu in a program, initiates retrieval of name and addresses and/or other person or company related information, while the user works simultaneously in another program, e.g., a word processor."

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