Software company claims Microsoft continues to infringe on ‘out-of-band’ patents

By Jessica M. Karmasek | Jun 15, 2015

EDISON, N.J. (Legal Newsline) - A New Jersey-based software company has filed a lawsuit against Microsoft Corp., alleging the computer giant is infringing on three of its patents.


StrikeForce Technologies Inc., headquartered in Edison, N.J., filed its lawsuit against Microsoft in the U.S. District Court for the District of Delaware June 5.


The patents at issue are U.S. Patent Nos. 7,870,599; 8,484,698; and 8,713,701. Entitled “Multichannel Device Utilizing A Centralized Out-of-Band Authentication System (COBAS),” the patents relate to several technologies underlying a multi-channel security system for granting and denying access to a host computer in response to a demand from an access-seeking individual and computer.


According to StrikeForce, the company was granted the so-called “out-of-band” patents from the U.S. Patent and Trademark Office in January 2011. Also, a reexamination certificate was issued after a successful ex parte reexamination concluded in December 2011, according to the company.


“There has been a sharp rise in cyber-attack. This increase has led to a strengthening of regulations, such as the (Federal Financial Institutions Examination Council) in the financial global market and HIPAA HiTech and Electronic Protected Healthcare Information (ePHI) in the health-care market, which are prompting an exponential increase in the use of out-of-band authentication,” explained Mark L. Kay, CEO of StrikeForce.


“In light of our having been granted the ‘599 patent and two others, and with increased activity in various markets by enterprises, government agencies and social media, StrikeForce will aggressively protect its patents.”


Kay called the patents a “critical” asset to his company.


“We will take whatever action is necessary to protect our intellectual property rights and maximize shareholder value,” he said.


According to the company’s 22-page complaint, the patents are directed to multi-channel security systems and methods for authenticating a user seeking to gain access to, for example, Internet websites and VPN networks, such as those used for conducting banking, social networking, business activities and other online services.


Such technology is sometimes referred to as out-of-band authentication.


When coupled with more traditional processes, they are more commonly known as two-factor authentication.


StrikeForce’s product, ProtectID, performs out-of-band authentication.


The company, according to its complaint, sent a letter to Microsoft’s CEO in October 2012 giving him actual notice of the ‘599 patent. The next month, StrikeForce sent another letter -- this time, to Microsoft’s chief patent counsel -- also giving actual notice of the patent.


StrikeForce contends that in the next year, Microsoft began offering its Windows Azure Multi-Factor Authentication product, with multi-factor authentication apps for Windows Phone, Android and IOS devices.


Microsoft continues to offer out-of-band authentication at no additional cost for its Active Directory, Windows Azure Active Directory and Office 365 products as a value-added feature, StrikeForce noted in its complaint.


As a result, StrikeForce is seeking: a judgment that Microsoft has infringed its patents; that Microsoft is willfully infringing; an order, by Microsoft, to account for and to pay it actual damages, including damages for lost profits; an award of treble damages; a preliminary injunction; a permanent injunction; and a written report, by Microsoft, setting forth in detail the “manner and form” it has complied with the injunction.


In lieu of a permanent injunction, StrikeForce is seeking an order requiring Microsoft to pay it monetary damages that will be suffered as a result of Microsoft’s “continuing post-verdict infringement” of the patents by forcing Microsoft to take a compulsory license at a reasonable royalty rate on all products that utilize the three patents.


StrikeForce also is asking for costs, expenses and fees, including reasonable attorneys’ fees, and pre-judgment and post-judgment interest.


Last week, the case was assigned to Judge Richard G. Andrews.


Microsoft could not immediately be reached for comment on the lawsuit.


Blank Rome LLP is representing StrikeForce in the case.


From Legal Newsline: Reach Jessica Karmasek by email at patents@legalnewsline.com.

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