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Microsoft's FAT Patent Upheld

The United States Patent & Trademark Office (USPTO) completed a reexamination of two Microsoft patents and decided to let them stand.

The patent office ruled that there was no prior art to invalidate Microsoft's '517 and '352 patents, covering aspects of the file allocation table (FAT) file system, which is used to keep track of the location and sequence of specific files stored on a PC's hard drive, a floppy disk or a Flash memory card.

The Public Patent Foundation (PUBPAT), a non-profit that works to improve patent quality and invalidate what it considers bad patents, requested the reexamination in June 2004.

"This reexamination is concluded, but that doesn't mean this patent can't ever be challenged again," said Dan Ravicher, PUBPAT's executive director. Moreover, if Microsoft were to take another company to court for infringing the FAT file patent, the defendant could ask the judge to determine whether the patent was valid.

But David Kaefer, director of business development for Microsoft's intellectual property and licensing group, said Microsoft isn't inclined to sue.

"In the history of Microsoft, we haven't initiated a single patent lawsuit against an infringer of a Microsoft patent," he said. "We are very committed to licensing."

The FAT file system is one of the technologies Microsoft has placed in its royalty-bearing licensing portfolio.

Pricing for the FAT file system license has been set at 25 cents per unit, with a cap on total royalties of $250,000 per manufacturer. The 25 cents per unit fee is available for devices that use removable media to store data, including PDAs, digital cameras, digital camcorders and portable digital audio players.

Kaefer said that Creative, Lexar, Pentax, Rockwell and Seiko Epson were among the companies that had licensed the technology. Other companies held off pending the results of the reexam.

"The rationale for the licensing program has been to allow people to improve their implementations," he said. "We have mutual customers that may have Flash memory disks and want to transfer files between Windows and non-Windows devices."

Linux support for FAT32, used in today's systems, started with the 2.0.34 kernel. Some industry watchers wondered if the FAT patents would let Microsoft stop distribution of Linux.

Ravicher believes the deck was stacked against PubPat because the reexamination was ex parte, meaning that only the examiner and the patent holder take part in the proceedings.

"They want a one-sided debate where we weren't allowed to participate," Ravicher said. "Microsoft gets an unlimited number of arguments, and we're barred from participating, so it's a pretty unfair process."

Steven Frank, an attorney specializing in intellectual property with the law firm of Goodwin Proctor, said he generally advises clients not to request an ex parte reexamination.

"It's a very risky move," he said. "Typically, the examiner who is responsible for the reexamination is the same one who was responsible for issuing the patent. You're telling the examiner, 'You did such a lousy job, you didn't notice this reference.'"

Another problem for a company hoping to get a patent thrown out, Frank said, is that, because the complaining party doesn't participate, the examiner and the patent holder work together to defuse the argument.

But under current U.S. law, only patents issued before Nov. 29, 1999, can be reexamined inter parte, a process in which any interested party can participate.

In response to a request for public comment by the USPTO on whether inter parte reexaminations were fair, Ravicher argued that they could help improve patent quality by increasing the information available to examiners while affording businesses a less costly alternative than filing suit.

"We're very supportive of the reexamination process," Kaefer said. "We often use it ourselves. An important check on patent quality is allowing third parties to submit prior art."

Recently, one of Microsoft's lead intellectual property counsels requested that the patent office reexamine the Eolas patent on browser plug-ins.

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