Technion sues Microsoft for NIS 25m

The Technion claims Microsoft illegally used IP developed by one of its professors, after acquiring YaData for $150 million.

The Technion - Israel Institute of Technology yesterday filed a NIS 25 million patent infringement lawsuit with the Central District Court in Petah Tikva against Microsoft Corporation (Nasdaq: MSFT). The Technion contends that Microsoft has illegally used intellectual property developed by one of its professors, Rann Smorodinsky.

The Technion contends that, in 2008, Microsoft acquired the intellectual property of YaData, including innovative methods, algorithms, commercial secrets, research results, and various software, for $150 million. However, the university contends that all of YaData's know-how, technology, and assets were the research results of Prof. Smorodinsky, a full-time tenured employee at the Faculty of Industrial Engineering.

Technion's statement of claim says that it rejected in writing repeated requests by Yadata and Microsoft the right to use the assets, but that Microsoft decided to "commercialize the technology despite the money it had already invested."

The Technion also contends that Microsoft continued to employ Smorodinsky and YaData R&D team, despite the Technion's protests and the fact that it bans its faculty from working for other employers, except with prior written approval.

The Technion says that YaData's founders, and subsequently Microsoft, were aware of the restrictions placed by the Technion on the intellectual property. The Technion appended letters from late 2006 through 2008 in which it notified all the relevant parties about these restrictions. In September 2006, it granted Smorodovsky the right to transfer the company's know-how on the condition that his consultancy was limited to business and commercial matters. If he wanted to expand the topics of the consultancy, he would have to notify the university, which would review this on a case-by-case basis.

The Technion also contends that it subsequently learned, in October 2007, that Yadata employed Smorodovsky on the development of its products, in breach of the terms of the permit, and installed his invention and the intellectual property that he developed, the smuggling of which the Technion sought to prevent.

The Technion claims that it repeatedly warned Microsoft, before it closed the acquisition of YaData, that the latter had infringed on the Technion's rights, but that Microsoft ignored the warnings.

The correspondence appended to the statement of claim shows that Microsoft contends that the Technion has no rights to YaData's intellectual property. Microsoft Israel said in response, "We received the statement of claim this morning, and we are studying it."

Published by Globes [online], Israel business news - - on June 7, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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