Updated: July 12, 2020 (February 3, 2003)

  Analyst Report

Patent Battles Gaining Importance

My Atlas / Analyst Reports

1,338 wordsTime to read: 7 min

With the possibility of a government-mandated breakup safely behind it and other antitrust cases nearing resolution, patent and intellectual property lawsuits are emerging as Microsoft’s largest legal battleground. Although these cases will never pose as much of a threat as the government’s antitrust lawsuit, they might help major competitors, such as Sony and AOL, block Microsoft from gaining ground in new markets. Delay, which helped Microsoft in its antitrust battle, is less effective in these cases, and Microsoft will look to settle them with patent swaps or one-time payments. But it will remain reluctant to pay ongoing license fees.

Dot-Com Bust Could Spur New Litigation

In a speech to financial analysts in New York on Jan. 22, Microsoft Chief Financial Officer John Connors listed six reasons why the company maintains such a large cash hoard—US$43.4 billion at last count—relative to similar companies. The risk of payouts from ongoing antitrust litigation was not mentioned. Instead, Connors predicted “a big increase” in intellectual property and patent litigation “over the next several years” and suggested that Microsoft wanted to keep some cash on hand to fight these battles.

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