Saturday, January 31, 2009

Microsoft suit alleges ex-worker stole trade secrets

Updated 4:55 p.m. PST with Mullor comment.
Correction, 5:12 p.m. PST: An earlier version of this story had the incorrect day the Seattle Post-Intelligencer reported on this suit. It was Thursday.

Microsoft has sued a former emp loyee for allegedly lying when he applied for a job there and stealing trade secrets that were ulterior used in a lawsuit against Microsoft partners.

According to the lawsuit, filed Ja nuary 22 in Singer County Superior Court, Miki Mullor stated on his application that he no longer worked at Ancora Technologies because it had gone out of business. However, Sammamish, Wash.-based Ancora was still in existence and he was the chief e xecutive, the lawsuit alleges. (The Ancora site was inaccessible on Friday.)

Microsoft suit alleges ex-worker stole trade secrets

Mullor was hired as a program manager in the Windows Security Set in November 2005, the lawsuit states. According to the suit, Mullor allegedly downloaded confidential documents onto hi s company-issued laptop at some point that were related to the subsequent patent lawsuit, and then allegedly used a file-wiping program and a "defrag" utility designed to overwrite deleted files in order to hide the tracks.

In June 2008, four d ays after Mullor allegedly tried to pelt his downloading activities, Ancora sued Dell, HP and Toshiba claiming that their use of certain Microsoft technology violated an Ancor a patent. In September 2008, Microsoft intervened as a party-defendant in the case and fired Mullor.

Mullor told CNET News early on Friday that he had been advised by an attorney not to comment on the lawsuit, but then later e-mailed a statemen t. Mullor said he informed Microsoft about his patent in his resume and employment agreement and that Ancora had ceased business operation before he applied to Microsoft.

Mullor also said he applied for his patent in 1998, it was issued in 2002 and in 2003 he approached Microsoft and discussed the "benefits Microsoft could realize by using it," but Microsoft wasn't interested. Then, while he was working at the troupe and unbeknownst to him, Microsoft developed profession that is the subject o f the patent lawsuit, he said.

"Microsoft's complaint against me in Washington is a shameful and a desperate attempt to put pressure on me and my family from continuing to pursue our valid rights in the federal court in Los Angeles," he wrote.

A Microsoft spokesman could not immediately be reached for comment late on Friday.

Mark Cantor, an professional representing Ancora in the patent litigation, accused Microsoft of trying to retaliate against Mullor for the patent lawsuit and said Mullor denies any wrongdoing.

Cantor also notes that in its lawsuit, Microsoft seeks a schematic license agreement providing Microsoft with "an irrevocable, perpetual, royalty-free, worldwide license" to the patent in dispute.

"This lawsuit raises fascinating legal issues as to what rights employees have when they work at a corporation like that," he told CNET News.

"Mullor developed this patent way before he worked at Microsoft," Cantor said. "He tried to license t his technology to them and they told him no. The man needed a job...so he decided to work for Microsoft."

Mullor worked on technology unrelated to the patent technology for about three years and then found out Microsoft "was infringing his paten t," Cantor said. "He got upset and the company filed the lawsuit."

The Microsoft lawsuit accuses Mullor of breach of contract, misappropriation of trade secrets, and fraud. The suit seeks unspecified damages and asks the court to bar Mullor from being involved in the patent lawsuit.

Meanwhile, a court hearing in the patent litigation is scheduled for March 10 and the trial date is January 26, 2010, in federal court in Orange County, Muslim., Cantor said.

The Ancora patent, da ted June 25, 2002, covers profession that identifies and restricts the operation of an unauthorized package program. The patent lawsuit alleges that Microsoft's OEM Activation technology that original equipment manufacturers use to prevent piracy of pre -installed Microsoft's Windows Vista package, infringes on that patent, Mullor said.

The Seattle Post-Intelligencerreported the Microsoft lawsuit on its Web site Thurs day.



Cheers~

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