Sept. 30 (Bloomberg) -- Microsoft Corp., the world’s biggest maker of computer software, won a ruling that throws out a $388 million jury verdict over a patent on software used to deter piracy.

U.S. District Judge William Smith in Providence, Rhode Island, yesterday vacated the April verdict. The jury had found that Microsoft violated a patent owned by Uniloc Singapore Private Ltd. and Uniloc USA Inc., which claimed Microsoft wrongfully used their security technology to earn billions of dollars.

Uniloc’s suit, filed in October 2003, targeted Microsoft’s Windows XP operating system and some Office programs. Microsoft, based in Redmond, Washington, argued that it used a different method for registering software and that the patent was invalid.

The jury “lacked a grasp of the issues before it and reached a finding without a legally sufficient basis,” Judge Smith said in his order.

Lawyers for Uniloc showed jurors at trial a pie chart with $19.1 billion in revenue from the Windows XP operating system and some versions of Word. They were seeking 2.9 percent of that total, or $564 million. The jury awarded the Singapore company $388 million.

The panel’s award was the second-largest patent verdict this year, behind a $1.67 billion verdict against Abbott Laboratories in July.

Even if an appeals court decides the jury verdict was appropriate, Microsoft would be entitled to a new trial on the issue of damages because Uniloc shouldn’t have been able to use the $19 billion figure in front of jurors, the judge said.

Patent’s Validity

Smith said Microsoft doesn’t infringe Uniloc’s patent. He denied Microsoft’s challenge to the validity of the patent.

Microsoft’s Windows software runs about 95 percent of the world’s personal computers. Windows Vista, the company’s current operating system, wasn’t part of the case.

Dean Bostock, a lawyer for Uniloc in Boston, didn’t immediately return a call seeking comment.

Microsoft fell 8 cents yesterday to $25.75 in Nasdaq Stock Market trading. The shares have gained 32 percent this year.

The case is Uniloc USA Inc. v. Microsoft Corp., 03cv440, U.S. District Court, District of Rhode Island (Providence).

To contact the reporters on this story: Susan Decker in Washington at sdecker1@bloomberg.net; Cary O’Reilly in Washington at caryoreilly@bloomberg.net.

Last Updated: September 30, 2009 00:01 EDT