Patent Damages and Defensive Patents
During the recent controversy regarding Microsoft’s RSS related patent, there seemed to be a general disbelief that Microsoft was filing the patent primarily for defensive purposes. As an example of the patent litigation landscape today, Don Dodge posted about a patent suit against Google, Apple, and Napster. Even more illustrative of the dangers of patent actions, Bloomberg published an article yesterday about patent litigation damages. Bloomberg found that patent damages have steadily increased and that patent actions in U.S. resulted in $1 billion in patent damages last year, an amount almost triple the 2005 amount.
Bloomberg listed Microsoft as suffering the second largest patent damage award.
A Texas jury awarded his client $133 million, including $115 million from Redmond, Washington-based Microsoft. U.S. District Judge Leonard Davis added $25 million in damages against Microsoft, based on a jury finding of willful infringement. Microsoft, the world's largest software maker, has appealed.
What you don’t see on that list is any offensive patent claims by Microsoft. Given the size of a target that Microsoft presents for patent suits and the potential of incredibly high damages, it’s only prudent for Microsoft to take actions, including defensive patent applications, to protect itself.
February 5th, 2007 - 01:43
I think most reasonable people understand that defensive patents are a necessity, but given MS’s track record, you can understand why no one will trust MS further than you can be thrown
If MS truly is interested only in defensive uses, you could resolve the PR problem by disclaiming offensive uses of your patents, as Red Hat has done. You’ll understand why no one holds their breath for that, of course 
[One might add that Apple, Sun, Novell, and others who have licensed the use of your patents must have had some reason to do so- clearly they thought that there was some threat of offensive usage of your patents? Or is there some other explanation there?]
February 7th, 2007 - 18:22
Luis,
Thanks for your comments. Microsoft is interested in patents for a variety of reasons, including defensive purposes. It does not mean that Microsoft will not enforce its patents if necessary. But, by looking at our track record with regard to patent litigation, our use of patents offensively is exceedingly rare.
It’s worthwhile to consider that the patent licensing deals you mentioned were not one way. Just as those companies received patent benefits from Microsoft, Microsoft also gained patent benefits from those companies. Clearly, both sides of the deal appreciated the value of the other’s patents and acted accordingly. It’s not just about avoiding litigation. It’s also about getting access to technology for the betterment of your products and customers.