Microsoft Charges Employee With Spying

Microsoft has filed a lawsuit against a former employee, charging him with taking a job at the software giant in order to steal information that would be helpful in his patent infringement case against the company.

When Miki Mullor applied for a job at Microsoft in 2005, he said that he had been an employee of a company called Ancora that had gone out of business when in fact the company was still running and Mullor was its CEO, Microsoft alleges in the suit.

Once employed by the software giant, he downloaded confidential documents unrelated to his job about technology that Microsoft offers to computer makers, according to the suit, filed in the King County Superior Court in Washington. The technology lets end users forgo the Windows operating system activation process on PCs that come preloaded with the Windows software.

Then in June of last year, while Mullor was still employed at Microsoft, his company, Ancora, filed a suit accusing Microsoft of infringing on a patent related to the technology.

Ancora's lawsuit, filed in the U.S. District Court for the Central District of California, is against Dell, Hewlett-Packard and Toshiba, but because the technology in question was provided by Microsoft, the PC makers have asked the software maker to defend them against the claims.

Mullor describes a very different series of events. He claims that prior to getting a job at Microsoft, he had several discussions with a Microsoft lawyer and employees of Microsoft's anti-piracy group about the technology he developed. Microsoft said it wasn't interested in the technology, he said.

He later took a job at Microsoft because he wasn't earning a salary or benefits at Ancora, he said in a statement. When he took the job, he told Microsoft in writing about Ancora and the patent, he said.

Microsoft also alleges that Mullor ran programs on his laptop in an effort to wipe any evidence that would show he had downloaded the files. The software giant was able to detect which programs he ran and was able to recover some of the documents that he downloaded, according to the suit.

Also, Microsoft says it has e-mail evidence that in 2004, before Mullor applied for a job at the software company, he was already planning to file the patent infringement suit.

Microsoft contends that Mullor committed breach of contract for failing to disclose his continued involvement in Ancora, stole confidential documents and failed to disclose his intentions regarding the patent infringement suit. The company also believes that it is entitled to a royalty free license for Ancora's patent in part because Mullor didn't tell Microsoft that he knew of the patent even while he knew that Microsoft was still developing its own similar technology.

The company also accused him of fraud, misappropriation of trade secrets and unjust enrichment.

Mullor calls Microsoft's action a retaliation suit. "These are shameful, dishonest attacks on my character by Microsoft -- the company that stole my idea in the first place," he said in the statement. "Microsoft fired me for trying to protect my own invention -- an invention I told them about before they ever hired me."

He claims that one person he pitched his product to at Microsoft before he started working there was involved with the development of Microsoft's activation technology.

Mullor is listed as chairman and founder of Ancora on its Web site, which as of midday on the West coast appeared to be offline. His biography included his time working for Microsoft and said that he once served in the Israeli Military Intelligence and has a law degree from an Israeli university.