Ric Richardson, the "man in a van" battling Microsoft in a patent suit worth hundreds of millions of dollars, has something to be excited about after an appeals court ruled in his favour.
The Australian inventor whose company, Uniloc, was awarded in April 2009 $US388 million in a patent infringement case against Microsoft, only to have the jury decision overturned by a judge, has this week had success in having the ruling against Microsoft reinstated by an appeals court.
Richardson, 48, patented the technology designed to deter software piracy in the early 90s. He is a serial inventor with over 40 patents to his name and does much of his thinking in his van, which he dubs the "DickMobile", near his leafy property in Byron Bay.
Ric Richardson's mobile office in Byron Bay.
"A few people were rolling their eyes when they first heard that I wanted to go after Microsoft," Richardson told this website in a telephone interview yesterday. "But in the end I got enough supporters and it actually happened but it's a pretty heavy thing to do looking back. It's actually quite funny."
Richardson's website lists over 140 projects and inventions, ranging from the "shadesaver" sun glass cords to a smart cruise control device for cars.
He said he was pleased with the outcome and that Microsoft were probably "the hardest ones to litigate against" in the scheme of things. "But, you know, that's part of our ethical approach of going after the people that did the wrong thing rather than just going after easy targets and have them fold because they can't afford to fight against us."
Richardson at his other desk.
He was dumbfounded in September 2009 after US Direct Judge William Smith "vacated" the jury's earlier decision in the case, which had awarded him one of the largest patent pay-offs in US history. Smith said the jury "lacked a grasp of the issues".
The case, which alleges Microsoft earned billions of dollars by using Richardson's anti-piracy technology in its Windows XP and Office programs, has been going through the courts since 2003 and Uniloc has been appealing the judge's decision, alleging bias.
But, just this week, Richardson was informed of the outcome of the appeal, which reinstated Microsoft's guilty verdict.
The US Court of Appeals for the Federal Circuit ruled that Microsoft infringed Uniloc's patent to prevent software piracy but also tossed out a popular method of calculating damage awards for infringement.
It called the jury's damages award "fundamentally tainted", and granted a new trial on the damages.
In its ruling, the court said it would no longer accept "the 25 per cent rule", which assumes that the company licensing a patent is due 25 per cent of the value of the product.
"This court now holds as a matter of Federal Circuit law that the 25 per cent rule of thumb is a fundamentally flawed tool for determining a baseline royalty rate in a hypothetical negotiation," the court said in its ruling.
Microsoft, which has set aside money to cover any damages, was pleased with the decision to ditch the 25 per cent rule.
The case "may signal the end of unreasonable and outsized damages awards based on faulty methodology", said David Howard, a vice president of Microsoft, in a statement.
Uniloc chief executive Brad Davis said the ruling was positive for his privately held company.
"We disagree with the damages component but at the end of the day ... it's a big win on the strength of the patent," Davis said. "We invented it. We thought of it."
However, Richardson believed the damages component being reassessed may be a good thing.
"What's really interesting about that is that for the first time we've actually seen a whole lot of Microsoft propaganda come out from the Microsoft machine all talking about the fact that they've questioned the damages calculation as being an obvious slap in the face that says we go too much," he said.
"But that's not what the actual judgement decision said. It just said simply that they didn't agree with the way the calculation was made, which doesn't say anything about whether it was too much or too small."
Richardson believed it may even give Uniloc the ability to "have another bite of the apple" and use the decision to "go for more" damages in the case.
"The fact of the matter is that it [gives us] the ability to re-calculate," he said. "It means that we can actually have another bite of the apple and use the calculation that the appeal court was actually expecting."
Although patent damages awards will be shared amongst Uniloc's other shareholders, Richardson owns a major chunk of the company and is set to potentially reap many millions.
Previously, Richardson said that he and his wife donated to a charitable cause that he would not reveal.
He said the cause would get any excess money he earned beyond that required to maintain his lifestyle. To celebrate the Microsoft victory in April 2009, before the jury decision was overturned, the pair bought a "chook shed".
"You can really live well on $10-15 million in assets," he said.
"You should set your lifestyle around something that's reasonable and then treat the rest of it for what it really is, which is a business success score."
Meanwhile, Richardson's company is also going after tech giants Sony and McAfee.
