
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, February 24, 1994                   TAG: 9402240157
SECTION: BUSINESS                    PAGE: C-10   EDITION: METRO 
SOURCE: Seattle Post-Intelligencer
DATELINE: SEATTLE                                LENGTH: Short

MICROSOFT GUILTY OF PATENT VIOLATION

Software giant Microsoft Corp., previously unscathed in legal battles over its business practices, suffered a stunning setback Wednesday when a federal jury found the company guilty of patent infringement and awarded $120 million in compensatory damages to a small California rival.

After a monthlong trial in Los Angeles, the seven-member jury decided that Microsoft used data-compression technology in the latest versions of its MS-DOS desktop computer operating system that violated two patents - though not deliberately - held by tiny Stac Electronics Co. of Carlsbad, Calif.

Microsoft attorneys said they would seek to overturn the findings and appeal the verdict if necessary.

Stac, which makes most of its money selling a software utility for MS-DOS that more than doubles the amount of data that can be stored on PC hard disc drives, tried to negotiate a deal with Microsoft in 1992 so Stac's award-winning technology could be included in MS-DOS version 6.0.

Stac officials claimed Microsoft tried to leverage the smaller company into an unfavorable deal using its dominance of PC operating systems; when Stac refused, Microsoft bought a technology from a competing company, named the feature DoubleSpace, and included it in MS-DOS 6.0 and MS-DOS 6.2.

"This case and its outcome could have a monumental effect on our industry in the way companies compete," said Gary Clow, president and chief executive officer of Stac.

by CNB