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Patent Spending

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Technology companies are aggressively asserting their rights to payments from disputed patents, violated copyrights and abuse of intellectual property. Now, the mayhem is spreading to customers who use contentious technology, and it may require them to take extraordinary measures to avoid intellectual property litigation.

The biggest risk: A company developing software for its own use might infringe on other companies’ patents or, even trickier, become the target of firms that buy up patents and look for opportunities to make money by enforcing them.

In the latest high-profile intellectual property lawsuit, a federal district court jury sided with Eastman Kodak in a two-year lawsuit charging that Sun Microsystems’ Java programming language infringed on patents owned by the photography company.

Kodak acquired the patents, which cover ways in which software objects communicate data among themselves, when it bought Wang Laboratories in 1997.

Kodak had demanded more than $1 billion in damages, raising anxiety among Sun customers that such a large judgment might sink the financially troubled company. Before the damages phase of the suit, however, Kodak agreed to settle the case in exchange for a $92 million payment from Sun.

Meanwhile, the SCO Group has filed a $3 billion lawsuit against IBM for allegedly publishing proprietary SCO Unix code in the open-source Linux operating system. And Amazon is at odds with Soverain Software, which initiated action alleging the online giant has infringed on several patents originally granted to companies other than Soverain, including a shopping-cart function patented by the defunct OpenMarket.

Next Page: Is your company next?

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Kevin Fogarty

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