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WILLIAM L. ANTHONY, JR. (State Bar No. 106908) 
ERIC L. WESENBERG (State Bar No. 139696) 
HEIDI L. KEEFE (State Bar No. 178960) 
ORRICK, HERRINGTON & SUTCLIFFE LLP 
1000 Marsh Road 
Menlo Park, CA 94025 
Telephone: (650) 614-7400 
Facsimile: (650) 614-7401 

JOHN D. VANDENBERG 
KLARQUIST SPARKMAN, LLP 
One World Trade Center, Suite 1600 
121 S.W. Salmon Street 
Portland, OR 97204 
Telephone: (503) 226-7391 
Facsimile: (503) 228-9446 

Attorneys for Defendant and Counterclaimant, 
MICROSOFT CORPORATION 


UNITED STATES DISTRICT COURT 
NORTHERN DISTRICT OF CALIFORNIA 
OAKLAND DIVISION 


INTERTRUST TECHNOLOGIES 
CORPORATION, a Delaware corporation, 

Plaintiff, 


v. 

MICROSOFT CORPORATION, a 
Washington Corporation, 

Defendant. 


MICROSOFT CORPORATION, a 
Washington corporation, 

Counterclaimant, 


v. 

INTERTRUST TECHNOLOGIES 
CORPORATION, a Delaware corporation, 

Counter-Defendant. 


CASE NO: C 02 Uo4 / SbA 

MICROSOFT CORPORATION'S ANSWER 
AND COUNTERCLAIMS 

(JURY TRIAL DEMANDED) 


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Defendant Microsoft Corporation ("Microsoft") answers the Complaint of InterTrust 
Technologies Corporation ("InterTrust") as follows: 

Microsoft admits that the Complaint purports to state a cause of action under the patent 
laws of the United States, 35 United States Code, §§ 271 and 281. Microsoft denies that it has 
infringed or now infringes the patent asserted against Microsoft in the Complaint. Microsoft 
denies any and all-remaining allegations of paragraph 1 of the Complaint. 

1 . Microsoft admits that the Complaint purports to state a cause of action over which 
this Court has subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1338(a). 

2. Microsoft admits, for purposes of this action only, that venue is proper in this 
judicial district. Microsoft denies any and all remaining allegations of paragraph 3 of the 
Complaint. 

3. Upon information and belief, Microsoft admits the allegations of paragraph 4 of 
the Complaint. 

4. Microsoft admits the allegations of paragraph 5 of the Complaint. 

5. Microsoft admits, for purposes of this action only, that it transacts business in this 
judicial district. Microsoft denies any and all remaining allegations of paragraph 6 of the 
Complaint. 

6. Microsoft admits that on its face the title page of U.S. Patent No. 6,1 57,721 ("the 
'721 Patent") states that it was issued December 5, 2000, is entitled "Systems and methods using 
cryptography to protect secure computing environments," and lists "InterTrust Technologies 
Corp." as the assignee. Microsoft denies that the '721 Patent was duly and lawfully issued. 
Microsoft further denies, or lacks information or belief sufficient to admit or deny any and all 
remaining allegations of paragraph 7 of the Complaint. 

7. Microsoft repeats and reasserts its responses to paragraphs 1-7 of the Complaint, 
as if fully restated herein. 

8 . Microsoft admits that the Complaint purports to state a cause of action under 
35 U.S.C. §§ 271 and 281. Microsoft denies that it has infringed or now infringes the patent 


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asserted against Microsoft in the Complaint. Microsoft denies any and all remaining allegations 
of paragraph 9 of the Complaint. 

9. Microsoft denies, or lacks information and belief sufficient to admit or deny as to 
InterTrust's claim as to any and all allegations of paragraph 10 of the Complaint. 

1 0. Microsoft denies any and all allegations of paragraph 1 1 of the Complaint. 

1 1 . Microsoft denies any and all allegations of paragraph 1 2 of the Complaint. 

12. Microsoft denies any and all allegations of paragraph 13 of the Complaint. 

13. Microsoft denies any and all allegations of paragraph 14 of the Complaint. 

AFFIRMATIVE AND OTHER DEFENSES 

Further answering the Complaint, Microsoft asserts the following defenses. Microsoft 

reserves the right to amend its answer with additional defenses as further information is obtained. 

First Defense: Noninfringement of the Asserted Patent 

Microsoft has not infringed, contributed to the infringement of, or induced the 

infringement of U.S. Patent No. 6,157,721 ("the '721 Patent"), and is not liable for infringement 
thereof. 

Any and all Microsoft products or actions that are accused of infringement have 
substantial uses that do not infringe and therefore cannot induce or contribute to the infringement 
of the '721 Patent. 

Second Defense; Invalidity of the Asserted Patent 

On information and belief, the '721 Patent is invalid for failing to comply with the 

provisions of the Patent Laws, Title 35 U.S.C., including without limitation one or more of 
35U.S.C. §§ 102, 103 and 112. 

Third Defense: Unavailability of Relief 

On information and belief, Plaintiff has failed to plead and meet the requirements of 35 

U.S.C. § 271(b) and is not entitled to any alleged damages prior to providing any actual notice to 
Microsoft of the '721 Patent. 


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Fourth Defense; Unavailability of Relief 

On information and belief, Plaintiff has failed to plead and meet the requirements of 35 
U.S.C. § 284 for enhanced damages and is not entitled to any damages prior to providing any 
actual notice to Microsoft of the '721 Patent, and any alleged infringement thereof. 

Fifth Defense: Unavailability of Relief 
On information and belief, Plaintiff has failed to plead and meet the requirements of 35 
U.S.C. § 287, and has otherwise failed to show that it is entitled to any damages. 

Sixth Defense: Prosecution History Estoppel 
Plaintiffs alleged cause of action for patent infringement is barred under the doctrine of 
prosecution history estoppel, and Plaintiff is estopped from claiming that the '721 Patent covers 
or includes any accused Microsoft product or method. 

Seventh Defense: Dedication to the Public 
Plaintiff has dedicated to the public all methods, apparatus, and products disclosed in the 
'721 Patent, but not literally claimed therein, and is estopped from claiming infringement by any 
such public domain methods, apparatus, and products. 

Eighth Defense: Use/Manufacture Bv/For United State s Government 
To the extent that any accused product has been used or manufactured by or for the United 
States, Plaintiffs claims and demands for relief are barred by 28 U.S.C. § 1498. 

Ninth Defense: License 
To the extent that Plaintiffs allegation of infringement is premised on the alleged use, 
sale, or offer for sale of a product that was manufactured by or for a licensee of InterTrust and/or 
provided by or to Microsoft to or by a licensee of InterTrust, such allegation is barred pursuant to 
license. 

Tenth Defense: Acquiescence 
Plaintiff has acquiesced in at least those acts of Microsoft that are alleged to infringe the 
'721 Patent. 


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Eleventh Defense: Laches 

Plaintiffs claims for relief are barred, in whole or in part, by the equitable doctrine of 

laches. 

Twelfth Defense: Inequitable Conduct 

The '721 Patent claims are unenforceable due to inequitable conduct, including those acts 
and failures to act set forth in Count III of Microsoft's Counterclaims, set forth below. 

Thirteenth Defense: Unenforceability 

The claims of the '721 Patent are unenforceable due to unclean hands, inequitable conduct 
and misuse and illegal extension of the patent right, including those acts and failures to act set 

forth in Count IV of Microsoft's Counterclaims, set forth below. 

COUNTERCLAIMS 
COUNT I - DECLARATORY 
JUDGMENT OF NONINFRINGEMENT 

1 . This action arises under the patent laws of the United States, Title 35 U.S.C. §§ 1, 
et seq. This Court has subject matter jurisdiction over this counterclaim under 28 U.S.C. §§ 1338, 
2201, and 2202. 

• 2. Microsoft Corporation ("Microsoft") is a Washington corporation with its 
principal place of business in Redmond, Washington. 

3 . On information and belief, Plaintiff /Counterclaim Defendant InterTrust 
Technologies Corporation ("InterTrust") is a Delaware corporation with its principal place of 
business in Santa Clara, California. 

4. InterTrust purports to be the owner of U.S. Patent No. 6,157,721 ("the '721 

Patent"). 

5 . InterTrust alleges that Microsoft has infringed the ' 72 1 Patent. 

6. InterTrust issued a press release on February 7, 2002. The press release stated that 
InterTrust had filed a law suit against Microsoft for patent infringement. The press release 
specified that InterTrust "alleges infringement by Microsoft's 'Plug and Play' Driver 
Certification Program." 


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7. Microsoft's certification of hardware drivers has not infringed, either directly or 
indirectly, any claim of the '721 Patent, and Microsoft is not liable for infringement thereof. 

8. An actual controversy, within the meaning of 28 U.S.C. §§ 2201 and*2202, exists 
between Microsoft, on the one hand, and InterTrust, on the other hand, with respect to the 

infringement or noninfringement of the '721 Patent. 

COUNT II - DECLARATORY 
JUDGMENT OF INVALIDITY OF THE '721 PATENT 

9. Microsoft repeats and realleges paragraphs 1-5 of its Counterclaims, as if fully restated 

herein. 

10. The '721 Patent, and each claim thereof, is invalid for failing to comply with the 
provisions of the Patent Laws, including one or more of 35 U.S.C. §§ 102, 103 and 112. 

11. An actual controversy, within the meaning of 28 U.S.C. §§ 2201 and 2202, exists 
between Microsoft, on the one hand, and InterTrust, on the other hand, with respect to whether 

the claims of the '721 Patent are valid or invalid. 

COUNT in - DECLARATORY JUDGMENT 
OF UNENFORDEABILITY OF THE '721 PATENT 

1 2. Microsoft repeats and realleges paragraphs 1 -5 of its Counterclaims, as if fully 
restated herein. 

13. Claims 1-43 of the '721 Patent application (SN 08/689,754), and claims 1-41 of 
the '721 Patent, were not and are not entitled to the benefit of any application filing date prior to 
August 12, 1996, under 35 U.S.C. § 120 or otherwise. 

14. United States Patent No. 5,910,987 ("the '987 Patent") issued on June 8, 1999, 
from a continuation of an application filed on February 13, 1995. 

15. The '987 Patent is prior art to claims 1-8, 10-29, and 31-43 of the '721 Patent 
application (SN 08/689,754). 

16. The '987 Patent is prior art to claims 1-41 of the '721 Patent under 35 U.S.C. 
§ 102(e). 


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1 7 . The '987 Patent was material to the patentability of claims 1-8,1 0-29, and 3 1 -43 
of the '721 Patent application (SN 08/689,754). 

1 8 . One or more of the '72 1 Patent applicants knew, while the 72 1 Patent application 
(SN 08/689,754) was pending, of the '987 Patent. 

19. On information and belief, one or more of the attorneys who prosecuted or assisted 
in prosecuting the-'721 Patent application (SN 08/689,754) knew, while that application was 
pending, of the '987 Patent. 

20. The applicants for the '721 Patent did not cite the '987 Patent to the Patent Office 
as prior art to any of claims 1-43 of the '721 Patent application (SN 08/689,754). 

21. The applicants for the '72 1 Patent did not cite to the Patent Office as prior art to 
any of claims 1-43 of the '721 Patent application (SN 08/689,754) any reference having the same 
or substantially the same disclosure as the '987 Patent. 

22. The '987 Patent is not merely cumulative over any reference cited as prior art 
during the prosecution of the '721 Patent application (SN 08/689,754). 

23. On information and belief, one or more of the '721 Patent applicants believed, 
while the '721 Patent application (SN 08/689,754) was pending, that the '987 Patent was material 
to the patentability of one or more of claims 1-8, 10-29, and 31-43 of the '721 Patent application 
(SN 08/689,754), but, with deceptive intent, failed to disclose that reference as prior art to the 
Patent Office. 

24. The '721 Patent is unenforceable due to the inequitable conduct of the '721 Patent 
applicants and/or agents before the Patent and Trademark Office in connection with the '721 
Patent application (SN 08/689,754). 

25. An actual controversy, within the meaning of 28 U.S.C. §§ 2201 and 2202, exists 
between Microsoft, on the one hand, and InterTrust, on the other hand, with respect to whether 
;he claims of the '721 Patent are enforceable. 


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COUNT IV - DECLARATORY JUDGMENT 
OF UNENFORCEABILITY 

26. Microsoft repeats and realleges.paragraphs 1-5 and 12-24 of its Counterclaims, as 
if fully restated herein. 

27. In prosecuting, marketing, and enforcing various related patents, including the 
'721 Patent, InterTrust has engaged in a pattern of obfuscation as to the scope of the patents, the 
prior art to the patents, and the alleged "inventions" of the patents. For example, InterTrust has 
accused non-infringing products of infringement, has buried Patent Office Examiners with a 
collection of more than 400 references, many of which were not related to the particular claims in 
issue, and has buried the Examiners with hundreds or thousands of pages of redundant, verbose, 
unclear text, effectively prohibiting a real comparison of the alleged "invention" versus the prior 
art. This pattern of intentional conduct constitutes an abuse of the patent system, unclean hands, 
misuse and illegal extension of the patent right, rendering the '721 Patent unenforceable, as well 
as invalid under Section 112. 

28. An actual controversy, within the meaning of 28 U.S.C. §§ 2201 and 2202, exists 
between Microsoft, on the one hand, and InterTrust, on the other hand, with respect to whether 
the claims of the '721 Patent are enforceable. 

PRAYER FOR RELIEF 

WHEREFORE, Microsoft prays for the following relief: 

A. The Court enter judgment against InterTrust, and dismiss with prejudice, any and 
all claims of the Complaint; 

B. The Court enter judgment declaring that Microsoft has not infringed, contributed 
to infringement of, or induced infringement of the '721 Patent; 

C. The Court enter judgment declaring that the '72 1 Patent is invalid; 

D. The Court enter judgment declaring that the '721 Patent is unenforceable due to 
inequitable conduct; 

E. The Court enter judgment declaring that the '721 Patent is unenforceable due to 
abuse of the patent system, unclean hands, and misuse and illegal extension of the patent right; 


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F. The Court award attorney fees against InterTrust pursuant to the provisions of 35 
U.S.C § 285; 


G. 

The Court 

H. 

The Court 

I. 

The Court 


and appropriate. - 

JURY DEMAND 

Pursuant to Fed. R. Civ. P. 38(b), Defendant Microsoft Corporation demands a trial by 

jury. 


Dated: March 25, 2002 



WILLIAM L. 
ERIC L. WESENBERG 
HEIDI L. KEEFE 

ORRICK HERRINGTON & SUTCLIFFE, LLP 
1000 Marsh Road 
Menlo Park, CA 94025 
Telephone: (650) 614-7400 

JOHN D. VANDENBERG 
KLARQUIST SPARKMAN, LLP 
One World Trade Center, Suite 1600 
121 S.W. Salmon Street 
Portland, OR 97204 
Telephone: (503) 226-7391 

Attorneys for Defendant/Counterclaimant 
MICROSOFT CORPORATION 


Of Counsel: 

T. Andrew Culbert, Esq. 
One Microsoft Way 
Building 8 

Redmond, WA 98052-6399 
Telephone: (425) 936-6921 


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