MS to face jury trial in halftone patent case

A federal judge has found that Microsoft Corp. encroached upon patents held by a Tucson, Arizona-based company for a process that improves the quality of images displayed on computer screens and paper printouts.

Research Corporation Technologies Inc. (RCT) sued Microsoft on Dec. 21, 2001, in U.S. District Court for the District of Arizona, in Tucson. RCT charges that Microsoft uses technology covered by its patents in the Windows operating system as well as Office applications, said Brian Ferguson, an attorney with McDermott, Will & Emery who represents RCT, on Wednesday.

Senior U.S. District Court Judge William Browning on Tuesday granted a motion for summary judgment brought by RCT, ruling that the company has proved four patent claims while Microsoft failed to offer sufficient counterevidence. The software maker now has to defend itself in front of a jury, according to a copy of the judge's order.

"The judge has determined that Microsoft is guilty of patent infringement and that the technology is used in some of Microsoft's biggest products," Ferguson said.

The case will now continue to trial, where a jury will hear evidence and determine the extent of the patent infringements and the resulting damages to RCT. The potential damages could be worth hundreds of millions of dollars, Ferguson said.

RCT helps universities and startups develop technologies. It then patents those technologies and attempts to license them. This case involves patents related to technology used to create halftones, which was developed at the University of Rochester, in New York. Halftones are used to display images such as photographs on computer displays and to print them.

RCT has already settled cases over the same patents with Hewlett-Packard Co. (HP) and Lexmark International Inc., Ferguson said. HP and Lexmark, as well as Seiko Epson Corp., now license the technology from RCT, he said.

Microsoft is disappointed in the ruling and will continue to fight, company spokesman Jim Desler said. "We believe that there was no infringement and the technology in question was developed by Microsoft. We also contend that the RCT patents are not valid and look forward to the opportunity to present evidence on this point," he said.

No trial date has been set, but both Microsoft and RCT expect a jury trial at the end of this year or early next year.