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Microsoft’s patent portfolio, patent litigation and spending

IP Law & Business recently published some background on Microsoft, its patents, and the litigation related to those patents (See my post of Nov. 11, 2005 about Microsoft’s goal to move from 2,000 to 3,000 patents applied for a year, and references cite.). The following summary of that article comes from Pete Zura’s patent blog and I have shortened it somewhat and interpolated my comments.

Microsoft owns more than 5,000 patents. Over the past five years, Microsoft has been a defendant in 96 patent cases, mostly against what it derides as “patent trolls.” Meanwhile, Microsoft was a plaintiff in 11 cases. [RWM: Don’t we wish there were a metric on the median ratio of defendant to plaintiff cases to compare to this 9:1 example?] It currently has 40 pending patent cases. [RWM: since the company averaged about 20 cases per year for the past five years, it suggests that with this backlog the average case lasts roughly two years.]

Patent litigation is approaching half of Microsoft’s legal fees (somewhat more than 40% is antitrust litigation, and all the rest in dribs and drabs, relatively speaking). [RWM: With annual revenue of approximately $44 billion, if its outside spend were 60% of 0.4% of that revenue, it would be in the region of $110 million – so patent litigation might be $40-to-$60 million a year.] Microsoft’s in-house patent litigation team has three patent trial lawyers and three paralegals.