They've been set on an inevitable collision course for years but few would have expected Salesforce.com and Microsoft to take their Cloud battles into the courtroom.
Microsoft has filed a federal lawsuit against Salesforce.com, claiming the Cloud CRM market leader has infringed on nine of its patents. Microsoft is seeking a jury trial, damages, and injunctions. Microsoft claims that Salesforce.com “has profited through infringement of the Microsoft patents-in-suit”, according to the complaint, filed in federal court in Seattle
The patents in question cover technologies such as display and user-interface features. The move is significant in part because it is only the fourth time that Microsoft has initiated a patent suit against a competitor. The last time was in 2009 when it sued GPS provider TomTom over the company's in-car navigational devices. The oldest of the nine patents dates back to July 1997, with the most recent filed in July 2007.
Microsoft said in its complaint that it's seeking unspecified damages. It also wants a court order put in place that would prevent Salesforce.com from providing features in its offering that Microsoft claims it invented. One of the nine patents that Microsoft alleges Salesforce.com has infringed is: "System and method for providing and displaying a web page having an embedded menu" while another is : "Method and system for stacking toolbars in a computer display."
"Microsoft has been a leader and innovator in the software industry for decades and continues to invest billions of dollars each year," said Horacio Gutierrez, Microsoft deputy general counsel of Intellectual Property. "We have a responsibility to our customers, partners and shareholders to safeguard that investment, and therefore cannot stand idly by when others infringe our [intellectual property] rights."
For Salesforce.com, CEO Marc Benioff said: "Patent trolls are a part of doing business. This is not significant." But the potential for a courtroom battle was flagged up in a Salesforce.com regulatory filing in which the firm noted that it had been contacted by a “large technology company” which had alleged patent infringement. At that point, it argued in the filing: “The resolution of this claim is not expected to have a material adverse effect on our financial condition, but it could be material to the net income or cash flows or both of a particular quarter.
The allegations are the most tangible evidence to date of growing hostilities between the two firms. Salesforce.com CEO Marc Benioff has long used Microsoft as a butt of his marketing rhetoric, most recently telling the media that Microsoft has failed on the Internet. “Now when we're moving to the iPhone and the iPad, and this great new generation of computing,Microsoft is trying to hold us back with its monopoly. That's why Microsoft has failed,” he told.
For its part, Microsoft has been slower to the Cloud applications market, but its Dynamics CRM Online offering is now on wider global release and posing a tougher competitive threat in Salesforce.com's home market. Microsoft CEO Steve Ballmer has declared that Cloud Computing is the top priority for Microsoft today.
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