Microsoft Germany has lost before the Federal Supreme Court: the European patent on dynamic “presenting data to a user” with priority from a DE patent has been upheld. Microsoft had unsuccessfully sought its invalidity – the patent is the basis for today’s cloud and server technology.
The BGH ruled on this major legal dispute on 7 October 2021 (X ZR 98/19), and now this ruling has been made public. It is a patent dispute that affects many of today’s Big names with cloud and server technology, because it is about the basic structure for dynamic IT applications.
In 2000, two inventions by IT system architect Hardy Schloer were initially filed as German patents. This is the basis for the priority of the patent in suit, the European patent (EP1126674), which was applied for by the company Ravenpack AG (Germany) in 2000 and granted in 2006. In 2000, the Patentpool Group (Germany) had recognised the potential in Schloer’s “dynamic” IT architecture, which at that time seemed to make no sense, and founded Ravenpack AG to market the technology underlying this patent. This has been very successful in the area of financial analysis, among others. In this context “inventors being way ahead of their time”, please also read our blog post on the Netflix series “The Billion Dollar Code”.
The patent in dispute is registered at the German Patent Office under the number DE 600 31 088 and is entitled “Method and device for presenting data to a user”.
Patent infringement by Cloud technology MS Azure?
The present legal dispute arose because the patent holders asserted a patent infringement against Microsoft and brought an action against Microsoft before the Munich Regional Court in 2014. Because the patent in dispute describes essential basic technology that is also important for today’s cloud and server technology, the patent holders considered their patent rights to be infringed. Specifically, the Patentpool Group had noticed in 2010 that Microsoft was advertising its service for the cloud Microsoft system “MS Azure” – with drawings that, according to the Patentpool Group, corresponded to those of the patent in suit.
Microsoft Germany countered this accusation with an action for invalidity of the EP patent, a quite typical procedure. The patent in suit was neither new nor based on inventive step, Microsoft claimed, and referred to several publications, in particular publication K5. The Federal Patent Court nevertheless dismissed the invalidity action in 2019 (5 Ni 53/16), against which Microsoft Germany appealed to the highest German Court, the Federal Supreme Court (Bundesgerichtshof (BGH)).
Secure data path for server data – new and inventive?
The patent in suit describes access to a server and data stored there via data paths, by means of which the provision of data via a network to a user is above all made more secure. To this end, the patent in suit provides for at least one data path “via which control data associated with the selection of data is sent, the at least one data path being unidirectional”.
And publication K5 (international patent application WO 99 / 38 080 A1) also describes a method for presenting data to a user in a safety-related context. For example, it results in K5, among other things, that the user is notified if the authorisation check in the identifier database or in the request database shows a negative result.
But the BGH – like the Federal Patent Court, which dealt with the case in 2019 – still did not see this as a relevant objection to the patent in suit. It could not be directly and unambiguously inferred from K5 that it is ensured that in the process between the access to the server and the provision of the requested data, a transmission of data in the opposite direction is excluded, the BGH ruled.
However, the secure unidirectional data path is a decisive aspect in the patent in suit, the court explained. In accordance with the patent features, the description specifies a unidirectional transmission comprising control data and the processed data.
However, the procedure described in K5 could be technically realised in different ways. Unidirectionality of the data paths in the process between access to the server and provision of the data was not an inevitable consequence of such a design, but had to be ensured by appropriate measures, the BGH explained.
K5, however, did not mention any such measures and in particular did not indicate that it was ensured that a data transmission in the opposite direction via the mentioned connections was excluded under all circumstances.
Unidirectional data flow must exclude counterflow
According to the BGH, other documents cited by Microsoft also did not provide for or give any indication of a unidirectional data path within the meaning of the patent in suit.
For example, publication K6 disclosed a data and control network (switch ports and lines of the data and control network in half-duplex mode) and a unidirectional data flow. However, the BGH found that it could not be inferred from K6 that the connection in question precluded a data flow in the opposite direction.
Also, Microsoft was unsuccessful with a citation from the online banking sector: publikation K13 (Korean KR 10-020 59 54 B1) proposed as a solution a system known as a bank relay server system, through which a large number of customers could communicate with a large number of banks. Although a drawing of this was available in K13, which indicated a unidirectional data path with arrows in only one direction, the BGH did not recognise this in the sense of the patent in suit. It was not clear whether the arrows each represented a data flow, the court explained. In any case, it was not directly and clearly disclosed that a unidirectional data path was used and that a data flow in the opposite direction is excluded.
Other documents such as K7 and K12 describe a connection between the video session manager and the information server. There is data traffic in both directions between two components – this does not constitute a unidirectional data path. The BGH added that nothing else applies even if the client’s request remains unanswered.
Patent in suit on IT architecture upheld
The BGH therefore rejected Microsoft’s appeal in its entirety and confirmed the validity of the patent in suit for the territory of the Federal Republic of Germany.
Since patent protection ends after 20 years, this EP patent has expired in the meantime anyway. But this is very different from a patent that has been declared invalid, because the patentees can still invoke the patent protection, which was valid for 20 years. And lawsuits are admissible despite the expiry of the patent in suit – as has already been decided by the highest German court – if the plaintiff has reason to fear that he could still be exposed to claims for past acts even after the expiry of the term of protection. In any case, the origin patent dispute about Microsoft’s possible patent infringement by the cloud can continue before the courts in Germany.
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