Salesforce Suit Clouds Microsoft's Patent Attack
It looks like it's going to be tit-for-tat between CRM software leader Salesforce.com and Microsoft as the legal confrontation between the two expands. What happened this time?
It seems a bit like Mad magazine's Spy vs. Spy with each trying to cleverly sabotage the other, only it's cloud versus cloud in the latest legal tangle between Salesforce and Microsoft.
Salesforce (NYSE: CRM) sued Microsoft (NASDAQ: MSFT) for patent infringement on Thursday in U.S. District Court for the District of Delaware, claiming that Microsoft is infringing five Salesforce patents that were granted between 2004 and 2007.
Salesforce's lawsuit is widely seen as a countersuit to a patent infringement action that Microsoft filed against the on-demand application provider in mid-May. In its suit, Microsoft claims that Salesforce is in violation of nine Microsoft patents, including some granted before Salesforce existed.
Salesforce's suit, meanwhile, asks for treble damages, an injunction against Microsoft's use of the technologies at issue in the suit and attorneys' fees and court costs.
The final outcome of the two suits may define the role of cloud computing platforms in both enterprise and consumer spaces and how IT decision makers view cloud computing going forward. It's clear, if Salesforce's allegations are upheld, that Microsoft's cloud computing initiatives are threatened.
On the list of allegedly infringing products called out in Salesforce's suit are Microsoft's SharePoint Server and related products and technologies and Windows Server AppFabric, which is due out this month as part of the "computing fabric" for creating composite applications that take advantage of local servers as well as services in the cloud.
Other products at issue are the Windows error reporting system in Windows 7 and Windows Server 2008 R2, Microsoft's .NET development platform and its Windows Live delegated authentication system.
It should come as no surprise that several of the patents at issue have to do with the behavior of Microsoft's cloud computing initiatives, including the software giant's Azure cloud computing platform, development tools such as .NET for implementing applications on Azure, authentication for Microsoft's free consumer cloud offering Windows Live, and Microsoft's latest versions of its PC and server technologies.
Microsoft recently bragged that Azure has attracted some 10,000 paying customers since it launched commercially in February.
Perhaps a little ironically, one of the names on the suit may seem like déjà vu to Microsoft's legal team. Attorney David Boies, who led the federal government's antitrust assault on Microsoft in the late 1990s and early 2000s, is also a key player on Salesforce's litigation team this time around.
Microsoft declined to comment regarding the latest development.
"We are reviewing Salesforce.com's filing, which we have just received. We remain confident about our position and will continue to press ahead with the complaint we initiated in the U.S. District Court for the Western District of Washington," Horacio Gutierrez, Microsoft deputy general counsel for intellectual property and licensing, said in an e-mailed statement.
Ditto that for Salesforce.
"Salesforce.com does not comment on pending litigation, and we will let our court filings speak for themselves. We do not see this as material to our business and do not expect it to have any impact on customers," a Salesforce spokesperson said in an e-mailed statement.