US Report: Mouse maker slaps Microsoft with $1B lawsuit

The California company, founded in 1995, makes ergonomic peripherals, such as mice and keyboards, for PCs. Goldtouch, which filed suit in federal court in the Eastern District of Texas on Monday, is seeking treble damages and a permanent injunction against Microsoft "to enjoin them from any and all acts of infringement of Goldtouch's patents," according to the suit.

The legal action stems from a meeting between Microsoft and Goldtouch in September of 1997, at which time Goldtouch disclosed the design of its ergonomic mouse with an eye toward licensing the technology to Microsoft. "We came in on a friendly basis to look at various possibilities of licensing [the technology]," said Mark Goldstein, one of Goldtouch's founders. "That was our intent -- to jointly market or to license the technology to them."

At the meeting, and again at a later date, Microsoft officials said they were not interested in licensing or co-marketing with Goldtouch, Goldstein said. In the suit, however, Goldtouch alleges that during the meeting Microsoft officials asked detailed questions about Goldtouch's technology and product design, gathering considerable information on each.

Goldtouch alleges that the information was used later in the design of Microsoft's own IntelliMouse Pro ergonomic mouse. "In the year following the meeting with Goldtouch, Microsoft copied important features of the Goldtouch sample mouse examined at the meeting and began to manufacture its knock-off product," the lawsuit says. "Microsoft misappropriated Goldtouch's trade secrets to enhance its own inadequate designs."

Goldtouch is seeking damages based on a number of counts. The first count claims misappropriation of trade secrets discussed during the September meeting. The second and third counts claim infringement of Goldtouch's "Ergonomic Computer Mouse" patents. The fourth claims fraud, because "Microsoft intentionally made or intentionally caused to be made false representations of material fact to Goldtouch in that Microsoft fully intended to use in its own ergonomic mouse development the Goldtouch mouse design proprietary data presented at the 1997 meeting by Mark Goldstein," according to the suit.

The fifth count says "Microsoft wrongly dispossessed Goldtouch of its trade secrets." Asked if Goldtouch had been approached by the U.S. Department of Justice or any other parties suing Microsoft, Goldstein said, "We've been pretty low-key at this point. It might be a possibility, but it's too soon to tell."

Microsoft lawyers are reviewing the suit.