Former Microsoft employee accused of spying

Microsoft is suing a former employee for applying for his job under false pretenses and using his role at the company to gain access to confidential data related to patent litigation he is now waging, reports the Seattle Post-Intelligencer.

Miki Mullor was hired by Microsoft in November 2005 after stating in his job application that he was a former employee at Ancora Technologies, a local software development company that he said had gone out of business.

However, Microsoft claims Ancora was still a viable company and that Mullor was still its chief executive -- and that while he was at Microsoft, he downloaded confidential documents to his company-issued laptop.

The complaint was filed Jan. 22 in King County Superior Court.

Microsoft said the documents in question were related to the subject matter of a patent complaint Ancora later filed in June 2008 against Dell Inc., Hewlett-Packard Co. and Toshiba America Information Systems Inc., stating that their use of certain Microsoft technology violated an Ancora patent. Microsoft is now also a party in that case.

"The documents downloaded by Mullor relate directly to the subject matter of Ancora's Patent Action," Microsoft said in the complaint. "These documents had no bearing on Mullor's work at Microsoft at the time."

Microsoft fired Mullor in September 2008.

On Ancora's Web site, Mullor is listed as chairman and founder. His biography notes that he previously worked at Microsoft.

The Web site also highlights the patent litigation:

"To secure each copy of (Windows), without burdening the honest user, (PC makers) use a technology known as System Locked Pre-Installation (SLP) to protect Windows against piracy.

"SLP is Ancora's technology and is covered by our pioneer patent, US Patent 6,411,941.

"This lawsuit is about protecting our patent rights from being infringed by HP, Dell and Toshiba. This is not David vs. Goliath. This is David vs. three Goliaths."

Mullor's attorney in that case reportedly described the Microsoft complaint as "simply a retaliatory lawsuit by Microsoft to get the patent case transferred to Seattle."

The patent case is scheduled for trial in a Los Angeles federal court on Jan. 26, 2010.

Microsoft is seeking a court order barring Mullor from any involvement in the patent claim, including assisting Ancora with prosecuting the suit or providing trade-secret information he improperly acquired.

UPDATE: Mullor e-mailed me and directed me toward his official statement. I've pasted it below, in its entirety.

After the jump...

In response to numerous requests for comments regarding a lawsuit filed against me in Washington, I would like to make the following comments.

I am the inventor of U.S. Patent No. 6,411,941 relating to software anti-piracy technology, and Ancora is my company.

I applied for my patent in 1998. In 2002, the patent issued from the United States Patent and Trademark Office. In 2003, I approached Microsoft and had several discussions with a Microsoft lawyer and employees of Microsoft’s Anti Piracy group about my invention and the benefits Microsoft could realize by using it. Microsoft declined and said they had no interest in my invention.

After 3 years of working at a start up without salary and benefits, and with a first child about to be born, it was time for me to move on and look for a job to support my family. We ceased business operations at Ancora in 2005, and Microsoft was the first company to extend me an employment offer. I accepted. In early 2006, I moved my family to Seattle from Los Angeles, bought a house and focused on my new career at Microsoft. I enjoyed my job very much, and Microsoft commended my work and even promoted me.

When I joined Microsoft, I notified them in writing of Ancora and my patent in both my resume and in my employment agreement. In its complaint against me, Microsoft withheld the portions of these key documents that show this.

At the same time I was employed at Microsoft, but unknown to me, Microsoft was developing what is now known as “OEM Activation.”

OEM Activation is installed on computers made by HP, Dell, Toshiba and others (called OEMs) to prevent piracy of Microsoft’s Windows Vista software installed on those computers. This work was being done in a different department at Microsoft. OEM Activation is a blatant copy of my invention. In fact, the same Microsoft person that I explained my invention to back in 2003 was involved in the development of OEM Activation.

In June 2008, my company Ancora filed a patent infringement lawsuit against HP, Dell and Toshiba in the federal court in Los Angeles. Microsoft fired me for trying to protect my own invention --- an invention I told them about before they ever hired me. Microsoft was added to the Los Angeles case shortly after I was fired.

Recently, Microsoft filed a retaliation suit against me personally in Seattle. Microsoft accuses me of lying, deceit, fraud and misappropriation. These are shameful, dishonest attacks on my character by Microsoft – the company that stole my idea in the first place. Their attacks are untrue, and they hurt me and my family.

Microsoft basically admits stealing my idea in the complaint they filed because they are asking for a license to my patent. Microsoft would only need a license to my patent if they were infringing it in the first place.

My patent case in Los Angeles has been going on for several months now with substantial progress. Clearly, Microsoft and the PC OEMs realized that they have no defense on the merits of the patent case. They are now looking for ways to avoid being held liable for their actions -- they stole the technology, they’re infringing our patent, and the use of our invention by Microsoft and the OEM’s has generated millions of dollars in profits that would have otherwise been lost to piracy.

Microsoft’s complaint against me in Washington is a shameful and a desperate attempt to put pressure on me and my family from continuing to pursue our legal rights in the federal court in Los Angeles. We will not stop until the truth comes out. We are ready to take the stand for all other inventors and entrepreneurs and tell Microsoft: “no more.”