🚀 go-pugleaf

 From the court papers:
16. In late 1991, as a result of Mr. Gates' interest, Mr. Brad Chase -- 
who was then Microsoft's Group Product Manager and who today is 
Microsoft's General Manager for MS-DOS -- and Mr. Clow began discussing 
the possibility of Microsoft licensing Stac's proprietary data 
compression technology for inclusion in future versions of the MS-DOS 
operating system.

17. During the ensuing months of negotiations, Microsoft proposed that 
Stac grant to Microsoft a world-wide license to incorporate STACKER data 
compression technology and know-how into future versions of its MS-DOS 
operating system software. Microsoft steadfastly refused, however, to 
offer to pay Stac any royalty for Stac's patented data compression 
technology.

18. Mr. Chase made it clear during the negotiations that Microsoft was 
considering including data compression capability in future versions of 
the MS-DOS operating system, and that if it were unable to reach an 
agreement with Stac, it would obtain this capability elsewhere, even 
though Microsoft believed -- as it told Stac on numerous occasions -- 
that STACKER was the best data compression product for the DOS market. 
When the subject of incorporating data compression technology other than 
Stac's arose, Mr. Clow reminded Mr. Chase and others that Stac owned 
patent rights to its data compression technology and would enforce its 
patents against any infringers. At least one draft agreement was 
provided to Microsoft that included a specific reference to Stac's '009 
patent.

.
.
22. Shortly thereafter, it became well known to the industry that a new 
version of its DOS operating system, MS-DOS version 6.0 (``MS-DOS 6.0"), 
would be released in the first six months of 1993 and that MS-DOS 6.0 
would include a data compression utility, which Microsoft was to later 
call ``DoubleSpace.''



 From InformationWeek December 1, 1997:
Of course, if it chooses to proceed to court, Microsoft could lose. 
Would that humble Microsoft? You tell me.Was Microsoft any more humble 
after it lost the patent infringement suit filed against it by Stac 
Electronics for disk compression in DOS 6.0 in 1994? If you don't recall 
or weren't watching that case, instead of showing humility, Microsoft 
quickly changed the compression algorithm it uses in DOS and then 
Microsoft bought 15% of the company and everybody made nice.



 From AP:
Associated Press, February 23, 1994.
Microsoft Loses Patent Suit
LOS ANGELES (AP) -- Microsoft Corp. was found guilty of patent 
infringement and ordered to pay $120 million in damages to a tiny 
California firm in a rare setback for the giant computer software company.

However, the federal jury on Wednesday also ruled that the violation was 
not willful and awarded Microsoft $13.6 million on a counterclaim 
against Stac Electronics, which makes a data-compression program called 
Stacker.

Stac executives hailed the verdict as a victory for small companies 
trying to compete against Microsoft, the world's largest seller of 
personal computer software. ``We've been vindicated in that we were a 
small innovative company that invented a new technology that was very 
important to the computer industry'' said Gary Clow, Stac's president 
and chief executive officer. He said Stac would immediately request a 
permanent injunction forbidding further sales of Microsoft products that 
include Stac's program, but did not rule out a future agreement with 
Microsoft. ``We've had a third party that's impartial put a value on the 
technology. To the extent that might help us come to an agreement, I'd 
be willing to talk to them,'' he said.

Microsoft said it would seek to overturn the judgment, which it said 
would otherwise cut earnings for its fiscal third quarter, ending March 
31, by 26 cents per share. ``While we are disappointed with the jury's 
patent verdict, we believe the evidence and the law are on our side,'' 
the company said. Officials said Microsoft hadn't determined whether it 
will develop its own data compression program. Like Clow, they didn't 
rule out a future deal with their adversary. ``We're reasonable and 
open-minded about getting good technology and getting it to market,'' 
said William Neukom, Microsoft vice president for law and corporate 
affairs.

Redmond, Wash.-based Microsoft had revenues of $2.75 billion in the year 
ended June 30, 1993. Stac's sales for the fiscal year ended Sept. 30 
totaled $37 million.

Stac filed suit in January 1993, saying its program was unlawfully 
included in Microsoft's MS-DOS 6.0, a 1993 update of the operating 
system used in most personal computers. Operating systems run such basic 
computer functions as opening files.

By the end of this week Microsoft will begin shipping a new version of 
MS-DOS without data compression capability. Mike Brown, Microsoft's vice 
president for finance, said copies already on retailer's shelves won't 
be recalled.

Jurors, who did not give their names, said they calculated the damages 
based on about $5.50 per unit of MS-DOS 6.0. Clow said the award would 
cover monetary losses suffered by Stac, but couldn't fully compensate 
for damage to the Carlsbad, Calif.-based company. The loss of revenue 
when Microsoft included the program in its software forced the company 
to lay off about 20 percent of its workforce and prompted a lawsuit by 
disgruntled shareholders, Clow said. ``The company lost its momentum. 
I'm not sure money alone can restore that,'' he said.

Stacker sales account for about 85 percent of Stac's business, Clow 
said. The company produces three versions, for the MS-DOS, IBM Corp. 
OS-2 and Apple Computer Inc. Macintosh operating systems. The latest 
version, Stacker 4.0, retails for $100 to $150. Stac also produces 
semiconductors used in data compression, a process used to increase the 
storage capacity of a PC. For instance, the version of Stacker used by 
Microsoft can nearly double the capacity of a computer's hard drive, 
Clow said.

The jury agreed with Microsoft's counterclaim that its technology was 
stolen by Stac and used to develop the MS-DOS Stacker.


John R Pierce wrote:

> On Sun, 8 Feb 2004 06:46:50 +0000 (UTC), Steve Pope
> <spope33@speedymail.org> wrote:
> 
> 
>>q@q.com <q@q.com> wrote:
>>
>>
>>>Let's see...
>>>They infringed on Stac Electronics' compress algorithms which
>>>Microsoft incorporated in MS-DOS 6. The courts found Microsoft guilty
>>>of patent infringement. Microsoft eventually bought Stack Electronics.
>>>
>>Yes, sorta.  The patent infringment was probably there but
>>not really provable.  What made Microsoft fold was violating
>>an NDA.
>>
> 
> yeah, somethign like that... was a mess.  MS had a deal with STAC, then
> they tried to raise the ante, so MS backed out.  meanwhile, 6.20 was
> shipping with STAC code in it per the deal.  I don't believe MS bought
> STAC, I think they bought another garage firm that had a
> similar-but-different comprssion product.  
> 
> 
>