Microsoft's file system patent upheld

The decision, announced Tuesday by the software giant, effectively ends a two-year saga over the patents and reverses two non-final rulings--the latest issued in October--in which the U.S. Patent and Trademark Office rejected Microsoft's claims.

In their latest action, filed last week, the examiners concluded that the company's File Allocation Table (FAT) file system is, in fact, "novel and non-obvious," entitling it to patentability. Now the office is in the process of issuing a "patent re-examination certificate," which signals the finality of the decision, a Microsoft representative said.

The FAT file system, a common means of storing files, was originally developed for the DOS operating system, but has also been employed in Microsoft's Windows and on removable flash memory cards used in digital cameras and other devices. Some Linux- and Unix-related products also use the system to exchange data with Windows.

The Patent Office agreed to re-examine two patents covering the FAT system at the request of a little-known public interest group called the Public Patent Foundation in April 2004.

That organization claimed there was "prior art" that proved Microsoft was not the first company to come up with the file format.

It also voiced concern that Microsoft would try to seek royalties from companies that sell and support Linux for using the technology, potentially posing a threat to the free software community. Under the terms of the Free Software Foundation's General Public License, Linux cannot be distributed if it contains patented technology that requires royalty payments.

Microsoft indicated in the past that it would license the file format. In December 2003, it said it had struck such a deal with flash memory vendor Lexar Media.

The Patent Office's final decision followed several non-binding decisions that were unfavorable to Microsoft. After issuing its preliminary rejection of the patents in September 2004, examiners handed down a similar decision about a year later.

All along, Microsoft voiced confidence that the patents would be upheld. David Kaefer, the company's director of business development, said Tuesday that the company was "very pleased" with the office's final decision. "This result underscores the validity of these patents but also the importance of allowing third parties to request re-examinations," he said in a statement.

Public Patent Foundation President Dan Ravicher said his organization disagreed with the Patent Office's conclusions and offered a broader critique.

"Microsoft has won a debate where they were the only party allowed to speak, in that the patent re-examination process bars the public from rebutting arguments made by Microsoft," he told CNET News.com. "We still believe these patents are invalid and that a process that gave the public equal time to present its positions would result in them being found as such."

CNET News.com's Ina Fried contributed to this report.