Microsoft: employee stole documents for patent lawsuit

Microsoft is accusing ex-employee Miki Mullor of using his inside access to download internal documents for a patent complaint that his startup company, Ancora Technologies, has since filed against Dell, HP, and Toshiba. The suit alleges that the companies are infringing on Ancora's patent by selling computers with Windows Vista preactivated, which is possible thanks to one of Microsoft's anti-piracy technologies, System Locked Preinstallation (SLP). When Seattle Tech Report covered this story, the publication noted that Ancora's website described the case as follows:

To secure each copy of (Windows), without burdening the honest user, (PC makers) use a technology known as System Locked Pre-Installation (SLP) to protect Windows against piracy. SLP is Ancora's technology and is covered by our pioneer patent, US Patent 6,411,941. This lawsuit is about protecting our patent rights from being infringed by HP, Dell and Toshiba. This is not David vs. Goliath. This is David vs. three Goliaths.

On January 22, Microsoft filed its own lawsuit in King County Superior Court in Seattle, which claims Mullor wrote in his October 2005 Microsoft employment application that he no longer worked for Ancora because it was out of business. Nor did he disclose when hired that he believed SLP infringed on an Ancora patent. Microsoft, which is intervening in Ancora's patent lawsuit to defend its technology (and the PC makers) against the patent-infringement claims, now becomes Goliath number four.

Mullor, on the other hand, said he informed Microsoft about his patent in his résumé and employment agreement, though he notes that Ancora had ceased business operation before he applied to Microsoft. The documents Mullor downloaded from Microsoft before Ancora filed the lawsuit included information on the SLP and the upcoming Windows 7 operating system, according to Microsoft's complaint. They were downloaded onto Mullor's company-issued laptop, after which Mullor allegedly deleted them, then tried to hide his tracks by using software that overwrites deleted files.

Mullor was still a Microsoft employee when Ancora filed the suit against the PC makers; he was hired as a program manager in the Windows Security Group in November 2005. But in June 2008, four days after allegedly trying to hide his downloading activities, Ancora filed its patent lawsuit. In September 2008, Microsoft intervened as a party-defendant in the case and fired Mullor.

The Ancora patent is dated June 25, 2002, and Mullor claims he approached Microsoft in 2003 to discuss the "benefits Microsoft could realize by using it," but Microsoft wasn't interested. He believes Microsoft developed technology that is the subject of the patent lawsuit after his offer. Mark Cantor, an attorney representing Ancora in the patent litigation, said Mullor denies any wrongdoing, and described the Microsoft complaint as "simply a retaliatory lawsuit by Microsoft to get the patent case transferred to Seattle."

The patent case is scheduled for trial in a Los Angeles federal court on January 26, 2010, but Microsoft is seeking a court order barring Mullor from any involvement in the patent claim, which would bar him from assisting Ancora with prosecuting the suit with or without the documents he downloaded from the software giant. Mullor has given a statement on the situation, which you can read most of at the Seattle Tech Report.