Accused Spy Calls Microsoft Suit 'Desperate'

The former Microsoft employee accused of stealing company information is disputing Microsoft's version of events, saying the lawsuit against him is "a desperate attempt" to force him to abandon a patent infringement case.

"Microsoft's complaint against me in Washington is shameful and a desperate attempt to put pressure on me and my family from continuing to pursue our legal rights in the federal court in Los Angeles," said Miki Mullor in a statement he issued Friday.

Mullor, who was employed by Microsoft from November 2005 to September 2008, was sued by the company earlier this month for allegedly downloading documents related to a Microsoft antipiracy technology used by computer makers to lock Windows to their PCs. According to Microsoft, Mullor used his position to locate and download documents pertaining to the technology, dubbed "OEM Activation 2.0," because he planned to file a patent infringement lawsuit against the company.

Mullor failed to divulge that he was the CEO of Ancora Technologies Inc., when he was hired, Microsoft alleged. In July 2008, Ancora sued Dell Inc. , Hewlett-Packard Co. and Toshiba Inc., three of Microsoft's biggest hardware partners, over their use of OEM Activation 2.0, which Ancora said infringed on a patent it held to similar technology. Microsoft later joined the lawsuit, siding with Dell, HP and Toshiba.

Microsoft fired Mullor last September after allegedly finding evidence of his unauthorized downloading.

According to Mullor, however, he is the injured party. In 2003, a year after he was issued U.S. Patent No. 6,411,941 , he said he met with Microsoft to talk about the technology. "[I] had several discussions with a Microsoft lawyer and employees of Microsoft's Anti Piracy Group about my invention and the benefits Microsoft could realize by using it," Mullor said. "Microsoft declined and said they had no interest in my invention."

Mullor's patent, titled "Method of restricting software operation within a license limitation," spells out a way of "restricting software operation within a license for use with a computer including an erasable, non-volatile memory area of a BIOS of the computer, and a volatile memory area."

According to Microsoft , its OEM Activation 2.0 "uses information stored in an OEM computer's BIOS and hard disk drive to protect the installation from casual piracy."

OEM Activation 2.0, which was introduced with the launch of Windows Vista in 2006, is the successor System Locked Presinstallation (SLP), used to pre-activate Windows XP to a specific hardware configuration. SLP also uses the PC's BIOS to link a copy of Windows to a PC.

While he was working for Microsoft, the company began developing OEM Activation 2.0, Mullor claimed. "OEM Activation is a blatant copy of my invention," he said. "In fact, the same Microsoft person that I explained my invention to back in 2003 was involved in the development of OEM Activation."

Although Mullor did not address the accusations that Microsoft has made regarding downloading of confidential documents, and then trying to hide the evidence on his company laptop, he did deny that he kept his past, and his patent, a secret when he was hired. "When I joined Microsoft, I notified them in writing of Ancora and my patent in both my resume and in my employment agreement," he said. "In its complaint against me, Microsoft withheld the portions of these key documents that show this."

In an e-mail responding to a request for an interview, Mullor declined to comment beyond his statement.

"Microsoft basically admits stealing my idea in the complaint they filed because they are asking for a license to my patent," Mullor continued in that statement. "Microsoft would only need a license to my patent if they were infringing it in the first place."

Microsoft has, in fact, asked that it be given "an irrevocable, perpetual, royalty-free, worldwide license" to Mullor's patent, and the right to sublicense those rights to others, including OEMs. The company based that demand on a clause in the employment contract that Mullor signed in 2005.

"They stole the technology, they're infringing our patents, and the use of our invention by Microsoft and the OEMs has generated millions of dollars in profits that would have otherwise been lost to piracy," Mullor said.

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