Microsoft sued over e-commerce patent

ITworld.com |  Business

Online services company Network Commerce Inc. has been awarded a trial date in its patent infringement lawsuit against Microsoft Corp. The software giant is accused of using the smaller company's technology in its Windows operating system, Windows Media Player and other products.

Network Commerce, whose top executive is a former general manager at Microsoft, filed the lawsuit Dec. 6 in U.S. District Court for the Western District of Washington, said Anne-Marie Savage, a spokeswoman for Network Commerce. It was notified by the court last week that a trial date has been set for September 2003. "It's quite a process with all the discovery," she said, explaining the delay.

The suit accuses Microsoft of infringing a patent on a method for selling software, digital music and digital video over the Internet, Network Commerce said in a statement. Specifically, U.S. Patent No. 6,073,124 describes a system that uses "separate servers and a download component to coordinate the downloading of digital content for online transactions," the company said.

The patent was filed for in July 1997 and approved in June 2000, according to the U.S. Patent and Trademark Office Web site. It was issued to ShopNow.com Inc., which Savage said is a former name of Network Commerce.

Network Commerce, based in Seattle, plans to seek monetary damages, the amount of which has yet to be determined, Savage said.

Microsoft did not immediately return a call seeking comment.

Network Commerce offers a variety of services including domain name registration, Web hosting and online marketing. None of its current offerings makes use of the technology at issue in the lawsuit, although planned future offerings will make use of it, Savage said.

Dwayne Walker, the company's chairman and chief executive officer, held several key positions at Microsoft between 1989 and 1996, according to the Network Commerce Web site. They included general manager of sales and marketing, director of Windows NT and networking products and director of SQL Server and network products.

"I continue to be a shareholder and a fan of (Microsoft)," he said in the statement. "But that doesn't change our obligation to defend Network Commerce's rights to its innovative intellectual property. We hope to resolve this legal dispute amicably, perhaps through a licensing arrangement."

Network Commerce said it has a similar suit pending against Liquid Audio Inc. A U.S. court earlier this month declined a motion by Liquid Audio to dismiss the case, according to Network Commerce. Liquid Audio could not immediately be reached for comment.

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