Sony, Activision, Others Sued Over Software Activation By Uniloc

Sony Corp. (SNE), Activision Blizzard Inc. (ATVI) and several other companies were sued by a software company best known for going after Microsoft Corp. (MSFT) over its use of a product activation key.

Uniloc USA Inc. filed lawsuits in the U.S. District Court in the eastern district of Texas Thursday, alleging that the companies illegally use Uniloc's technology that allows for the identification and activation of purchased products.

Uniloc sued Sony's U.S. arm and its digital and optical media services business, video game publisher Activision, security software provider McAfee Inc. (MFE), publishing software maker Quark Inc., Borland Software Corp. and Aspyr Media Inc., which coverts PC games so they can run on Apple Inc.'s (AAPL) Mac software.

Spokesmen for the companies weren't immediately available to comment.

Uniloc's actions mark the latest legal strike in the technology world, where more companies are resorting to the courtroom to take on competitors or extract a new revenue stream through a forced licensing agreement.

In 2003, Uniloc sued Microsoft, alleging it illegally used its software activation key in Windows XP and Office. The key is used to prevent people from making copies of the software or installing the programs on multiple computers, as it requires a verification key tied to one device.

Uniloc initially won the initial suit and damages of $388 million last year after a six-year court battle, but a judge later overturned the ruling.

Uniloc is appealing the ruling, with oral arguments on the case slated for Sept. 7.

"This is a huge source of patent infringement," Chief Executive Brad Davis said in an interview. "It's not all what Uniloc is about, but it's something we have to address."

Uniloc, a privately held company based in Irvine, Calif., currently has licensing agreements with a number of companies, including videogame publisher Sega Corp.

"The industry sees (software activation) as a solution to piracy," Davis said. He added that a majority of the software industry uses the activation fee technology with few signing a licensing agreement, suggesting a wide open field of companies to sue.

On charges that Uniloc is a patent troll, which holds intellectual property but doesn't operate its own business, Davis said the company uses its technology to support ecommerce platforms.

It is just the latest company to take its differences to court. Last month, NTP Inc., which holds a number of patents but doesn't manufacture products, filed lawsuits against Apple, Google Inc. (GOOG) and a number of other smartphone companies over technology related to the wireless delivery of email. In June, Research in Motion Ltd. (RIMM) agreed to pay a lump sump and ongoing royalties to Motorola Inc. (MOT).

-By Roger Cheng, Dow Jones Newswires; 212-416-2153; roger.cheng@dowjones.com

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