A small computer hardware company, headed up by an Australian, has sued Microsoft for upwards of $US1 billion for allegedly stealing the firm's design for a user-friendly computer mouse.
In a suit filed late yesterday in US District Court, Eastern District of Texas, Marshall Division, GoldTouch Technologies, based in California, charges Microsoft with theft of trade secrets, patent infringement and fraud.
The company is seeking $1 billion in punitive damages plus other compensatory damages, the company's lawyer said.
"You've got to get that kind of a number before it has an effect on a big company like Microsoft," said Brandon Janes, with the law firm Akin, Gump, Strauss, Hauer & Feld, in Los Angeles.
GoldTouch says it met with Microsoft officials in September 1997 and shared with them the design for its ergonomic computer mouse, which is intended to reduce muscle strain and help lower the risk of repetitive stress injuries.he product was developed in 1995 by GoldTouch's president, Mark Goldstein, and his wife, Liz. Mark Goldstein, an Australian, also happens to be that country's delegate to the International Standards Organization. He has also designed an adjustable keyboard which GoldTouch licensed to IBM and Lexmark International.
GoldTouch decided to meet with Microsoft because it hoped the company would license and market its design. Instead, the suit alleges, Microsoft "stole the Goldsteins' invention for itself, and used its market power to divert to Microsoft profits to which the Goldsteins' business was justly entitled."
GoldTouch says Microsoft was aware that the small firm had filed a patent application for the product at the time of the meeting.
Over the following year Microsoft copied the design of the mouse, added some advanced features of its own and produced a "knock-off" product that Microsoft marketed and sold as the IntelliMouse Pro.
Mark Goldstein said he was surprised a company with the financial clout of Microsoft would choose to copy his product rather than pay a fee to license the design. "I didn't think they would be so willful and brazen; it really came as a shock," he said.
A Microsoft spokesman said the company is still reviewing the complaint, and was unable to comment on the lawsuit immediately.
Goldtouch eventually brought its product to market alone under the name the Goldtouch Mouse, but says it has lost significant sales because it can't compete with a big name brand like Microsoft.
GoldTouch has asked the court for a judgment that its patents are enforceable and were infringed by Microsoft, and wants a permanent injunction barring Microsoft from further infringement. The company is also seeking damages, including treble damages because of the willful nature of the infringement, and punitive damages of $1 billion for the malicious nature of the act.
The suit was filed in Texas because the courts there are less busy than in California and the case will be heard sooner, Goldtouch said. Microsoft has 20 days to file a written response.