No long, drawn-out IP battle for Microsoft, which said Wednesday it has settled the patent-infringement cases Salesforce.com brought against it. Salesforce also settled with Microsoft in a countersuit.
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The companies inked a patent agreement in which Salesforce will get broad coverage under Microsoft’s patent portfolio for its products and services as well as its back-end server infrastructure. In return, Microsoft gets coverage under Salesforce’s patent portfolio.
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Microsoft filed a patent-infringement action against Salesforce in the U.S. District Court for the Western District of Washington in May. Microsoft claimed Salesforce’s CRM product trespassed on nine of its patents. Salesforce countersued in June, alleging Microsoft willfully infringed on its intellectual property.
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Salesforce Pays Microsoft
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It’s rare for Microsoft to file a patent-infringement suit. The software giant has only filed four such suits in its history, though the company has been the defendant in scores of suits. It’s possible that Microsoft feels threatened by Salesforce’s software-as-a-service model. And it’s clear that Salesforce feels threatened by Microsoft. Salesforce CEO Marc Benioff called Microsoft an alley thug and a patent troll in a recent earnings call.
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Nevertheless, the companies came to an agreement. The financial terms of the settlement were not disclosed, but Microsoft said Salesforce is making a payment based on the strength of Microsoft’s patent portfolio in the areas of operating systems, cloud services, and customer relationship management (CRM) software.
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We are pleased to reach this agreement with Salesforce.com to put an end to the litigation between our two companies, said Horacio Gutierrez, corporate vice president and deputy general counsel of intellectual property and licensing at Microsoft. Today’s agreement is an example of how companies can compete vigorously in the marketplace while respecting each other’s intellectual-property rights.
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The Cloud’s IP Shootout
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Dana Gardner, principal analyst at Interarbor Solutions, said the Microsoft-Salesforce spat and settlement demonstrates how the cloud-computing…