San Francisco — Microsoft Corp. on Tuesday gave a major blow to Salesforce.com Inc., in a federal court filing, accusing that the customer-relationship management (CRM) vendor has violated on nine of Microsoft’s patents for ways to make software more efficient, adding a legal angle to the software companies’ brewing rivalry.
Redmond, Wash.-based Microsoft said in a complaint filed in federal court in Seattle that San Francisco-based Salesforce.com has deliberately violated on patents related to methods including mapping data and displaying menus on Internet pages, seeks both monetary damages as well as temporary and permanent injunctions.
The complaint targets the customer-relationship management, or CRM, software that is the trademark of Salesforce.com’s business. Specifically, the company demands a jury trial and also asks that the damages be tripled and that Salesforce be ordered to pay legal fees and other costs, arguing that the company’s patent infringement is intentional. Fufthermore, it also calls for a court order that would forestall the San Francisco-based company from providing features that Microsoft claims it invented.
“Microsoft has been a leader and innovator in the software industry for decades and keeps on investing billions of dollars each year in bringing great software products and services to market,” deputy general counsel of Intellectual Property, Horacio Gutierrez said in a statement. “We have a responsibility to our customers, partners, and shareholders to safeguard that investment, and therefore cannot stand idly by when others infringe our IP rights.”
“We have an obligation to our customers, partners and shareholders to safeguard that investment, and therefore cannot stand idly by when others infringe our intellectual property rights,” Gutierrez said.
Jane Hynes, a Salesforce.com spokeswoman, declined to comment.
Salesforce.com, established in 1999, has pioneered the use of on-demand customer relationship management software, which it sells through subscriptions to Internet business software that runs marketing campaigns and tracks sales leads. It competes against Microsoft’s Dynamics programs in the CRM market and “has profited through infringement of the Microsoft patents-in-suit,” according to the complaint, filed in federal court in Seattle.
“More and more, we are seeing Dynamics compete with Salesforce in deals,” said Ray Wang, an analyst with Altimeter Group in San Mateo, California. “Long term, Salesforce and Microsoft are on a collision course for all enterprise software.”
CRM is an increasingly popular segment of the $250 billion corporate-software market, with a value of $7 billion to $8 billion a year, he said. The patent dispute pits the world’s largest software maker against the biggest seller of Internet- based customer-management programs. Salesforce.com had more than $1.3 billion in sales last year.
Microsoft has developed a massive arsenal of patents, though they are mostly used for defensive purposes. The company ranked third on the IFI Patent Intelligence list of top patent recipients in the U.S. in 2009, with 2,906. The patents cover a variety of back-end and user interface features, ranging from one covering a “system and method for providing and displaying a Web page having an embedded menu” to another that covers a “method and system for stacking toolbars in a computer display.”
Microsoft sells its own online CRM software, though none of the patents it is suing over are specifically related to that product.
The move was a extraordinary one for Microsoft. Although the company is often the target of patent litigation, it is rarely the instigator. In Microsoft’s 35-year history, it has accused others of infringing its patents only three times before today.
The last time was in 2009 when it sued GPS maker TomTom over the company’s in-car navigational devices.
“They do not sue often,” said Rob Enderle, an analyst at Enderle Group. “It is very rare that they aggressively go after someone on patents. But these are core Microsoft patents, the company’s ‘crown jewels’. They will heavily defend these against any software developer.”
The case is Microsoft Corp. v. Salesforce.com Inc., 10cv825, U.S. District Court, Western District of Washington (Seattle).