Goldtouch invented and applied for a patent for an ergonomically superior computer mouse, which it showed to Microsoft in a September 1997 meeting, the company says. Goldtouch was hoping to enter a licensing agreement with the software giant, but Microsoft indicated it was not interested, according to the lawsuit.
Microsoft, however, turned around and introduced its own ergonomic computer mouse a year later. Microsoft's mouse appropriates some of the patented features of the Goldtouch mouse, as well as some of the technology discussed at the meeting, Goldtouch president Mark Goldstein alleged today.
"There's an implied confidentiality when you go into those meetings," Goldstein said. "It was not an open meeting."
Although there was not a written non-disclosure agreement, or NDA, a verbal agreement or ongoing confidential relationship can also hold up in court, according to patent attorney Barry Young of Palo Alto, California, law firm Gray, Carey, Ware & Freidenrich.
"Most people use a written confidentiality agreement, but Microsoft typically will not sign an NDA," Young said. "An implicit agreement can arise when past discussions had been understood to be confidential."
Microsoft declined to comment on the specifics of the case. "We're just now reviewing the complaint," said a Microsoft spokesman, adding: "We're confident that the facts will show that there is no basis for their claims."
Goldtouch is demanding compensatory and punitive damages of $1 billion, according to the suit, and alleging that the infringement was malicious and fraudulent.
"We're really fighting for our survival here--we can't compete against our own mouse marketed by Microsoft," said Goldstein. "Punitive implies punishment. With the size of Microsoft, it has to be a substantial amount for the punishment to have any effect."
Patent infringement is generally much easier to prove than fraud or misappropriation of trade secrets, Young noted. "This is not necessarily frivolous, based on the facts as presented. If the basis of the complaint is patent infringement, it's a lot more objective: You can actually get the mouse and see what the patent covers."
Fraud and trade secrets are a much murkier area, he said. "It's pretty hard to prove that there was an agreement unless you have a signed contract."