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Bill Gates' other company dinged for fraud

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Seattle-based software company Infoflows has been awarded $20m in damages by a US Court, ending a three year dispute with Corbis. The judge decided that Corbis illegally stole Infoflows' intellectual property - its software.

The names may not immediately mean much to you. But Corbis was founded in 1989 by William Henry Gates III - founder of Microsoft - who is the largest shareholder in the privately-owned company. Infoflows is a small Washington state company founded by former Microsoft product manager Steve Stone six years ago.

Corbis is No.2 in the stock photo market behind Getty Images, having acquired the Bettman Archive and rights to digital reproductions of several museums and galleries, including the National Portrait Gallery.

Infoflows had developed a license management system for digital assets, including images, called JazzSpider. The startup signed a license agreement with Corbis, and in December 2005 sent Corbis a PowerPoint™ slide of how the JazzSpider software worked. In June the following year, a licensing agreement between the two was signed.

Infoflows then discovered that Corbis was patenting its own system based on what Infoflows saw as its own IP. The agreement was terminated after four months, and in January 2007, Corbis sued Infoflows for breach of contract and trade secret misappropriation. Infoflows countersued claiming several charges of fraud.

A jury in November agreed with Infoflows and awarded $16m in damages. In February this rose to $19m, plus interests. The jury also awarded costs against Corbis. The judgement had a sting, for it required Corbis to turn over any work similar to Infoflows' JazzSpider.

Yet Infloflows executives have had to drain their life savings to fight the giant. Fashionable opinion doesn't care much for intellectual property for software, but the case surely illustrates its value.

You never know when you might need it. It might even protect you from Bill Gates. ®

Related link

Infoflows Court Documents

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