Patent infringement takes place when one party engages in the unauthorized use of another party’s patent. A typical example of an infringement claim was that initiated by Alacritech, a start-up firm, which claimed that Microsoft violated two of its patents on technology used to speed the performance of computers connected to networks. According to court documents, Alacritech showed its technology to Microsoft in 2003, hoping that Microsoft would license it. But Microsoft passed on the offer and later announced a surprisingly similar technology, called Chimney. Alacritech again offered to license the technology to Microsoft but was rebuffed. In response, Alacritech filed suit against Microsoft in 2004. Microsoft claimed that its technology was developed independently. In April 2005, the U.S. District Court in San Francisco sided with Alacritecha dn filed a preliminary injunction against Microsoft, preventing it from shipping products that contained contested technology. In mid-2005, the suit was settled out of court, with Microsoft agreeing to license Alacritech’s technology.
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