On 04/29/97, "David F. Crosby" <dcrosby[_at_]usa1.com> wrote:
>
<snip>
> What was the basis for $13 Million in damages [on Microsoft's
> counterclaim against Stac]?
When Stac sued Microsoft for patent infringement over Double Space (or perhaps it was Drive Space, or both), Microsoft counterclaimed for trade secret infringement, alleging that Stac's integration of Stacker into MS-DOS 6 (specifically, Stac's use of the preloading feature of MS-DOS 6), which apparently was accomplished by disassembling portions of the operating system, constituted trade secret infringement. One of the barriers Microsoft successfully crossed was the issue of whether the "trade secrets" in fact were secret, in light of the wide distribution of DOS (although it may have been a licensed beta version that was disassembled). Either way, Microsoft argued that the license prohibited disassembly, so the "secrets" in fact were secret for purposes of trade secret law. That argument got Microsoft to the jury, and these days you would cite ProCD in support of the argument. The jury awarded Microsoft $6.8 million in compensatory damages and another $6.8 million in punitive damages for "willful and malicious" trade secret misappropriation. Microsoft never got to the point of enjoining Stac from selling compression software integrated with the operating system, as the case then settled. In my mind, the issue turns on the enforceability of the contract that says you cannot disassemble, and whether that contract or that portion of the contract is effective in light of Sega (977 F.2d 1510) and Atari (975 F.2d 832). Microsoft jumped all these hurdles to beat Stac, though, and you can imagine what an injunction would have done to Stac. So, the prospect of not being permitted to disassemble cannot be ignored.
Copyright 1997 by Brad Slutsky. This mail message is NOT legal advice. I do not purport to speak for my employer or any of its clients. I may not even be expressing my own views. Nothing in this mail message shall be construed as a solicitation of any kind or as binding on myself, my employer, or any of its clients. Include this disclaimer in any fair use of this mail message.
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