Microsoft Corp has filed a lawsuit against the Bellevue, Washington-based financial management reporting software house Timeline Inc, claiming that Timeline has breached the terms of a patent agreement the two signed last month. Microsoft says that Timeline refuses to acknowledge what it claims is its right to sublicense the patent to its third party developers.
Microsoft has been working with Timeline for nearly five years, and has apparently used technology covered by the Timeline patent – described as applying to the automated generation of data marts – in its SQL Server 7 and Office 2000 products. More recently, Timeline has been making moves to enforce its patent, and already has actions out against other software developers, including Clarus Corp and Sagent Technologies Inc.
Having signed the June contract, Microsoft appears to have acknowledged the validity of Timeline’s patent. But, it says, as the contract between the two clearly provides Microsoft with the right to sub-license the Timeline patent to our customers, we felt it necessary to take this action. If Microsoft doesn’t have the right to sub-license, as Timeline is insisting, then software developers who add further code or combine other products with SQL Server or Office may be liable to obtain their own license from Timeline.
In a statement issued in response to the Microsoft claim on Tuesday night, Timeline president and CEO Charles Osenbaugh said the agreement clearly distinguishes between users of Microsoft products who many employ Timeline technology, and certain third party developers to whom Microsoft many not sublicense. He said the sublicense issue has enormous value that could reach tens of millions of dollars and advised that anyone relying on a sublicenses from Microsoft seek the advice of their own counsel on the relevant language of the agreement.
Timeline published two clauses from the confidential agreement in order to help push its case. A license directly from Timeline is undoubtedly a more secure option for software developers he said.
