Microsoft, former employee settle over spying claims

Microsoft and a former employee have settled over claims of fraud, misappropriation of trade secrets and breach of contract.

Way back in January 2009, Microsoft sued 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 was waging.

Ancora Technologies, the company for which the employee, Miki Mullor, is chairman, announced on Tuesday that a settlement has been reached between Ancora, Mullor, and Microsoft for both claims regarding patent infringement and falsifying information.

The terms of the settlement are confidential, but all parties denied any and all liability, according to a statement.

"I am pleased with this resolution and wish my friends at Microsoft's Windows division nothing but success with Windows 7 launch," Mullor said in prepared remarks.

Ancora originally accused several computer makers including Dell, HP and Toshiba of infringing on a patent by allowing customers to bypass the Windows activation process if Windows was preloaded on the computers.

Mullor said he pitched the activation bypass technology to Microsoft during several meetings before he worked there. The company said it wasn't interested.

Microsoft alleged that Mullor didn't disclose continued involvement with Ancora, a breach of contract. The company also said that it was entitled to a royalty-free license for Ancora's patent because Mullor didn't reveal that he knew about the patent. (Microsoft was working on similar technology.)