The ruling by a US federal judge in California means that the company must recall all unsold copies of the software from distributors and dealers worldwide, and bars the sale of any PCs into which it has already been loaded.
The case has caused a stir in the computer industry as it is the latest development in a long-running battle between Microsoft and several smaller companies, which allege the software giant has been using strong-arm tactics to maintain its dominant position in the marketplace.
The judge's order follows a landmark verdict four months ago in which a jury in Los Angeles found that the Seattle-based company had infringed two patents held by Stac Electronics Inc, a small Californian company that uses data compression technology to increase the storage capacity of PCs. The jury awarded Stac dollars 120m in compensatory damages.
Stac had alleged that it approached Microsoft in 1991 to see if Bill Gates, its multi-billionaire owner, wanted to incorporate data compression technology into MS- DOS, the system used in many millions of PCs worldwide.
Microsoft liked the idea, but demanded a worldwide licence and allegedly refused to pay any royalties. When talks collapsed, Microsoft bought similar compression software from elsewhere and incorporated it into two MS-DOS versions (calling it DoubleSpace) and several other items of software.
Stac then sued for patent infringement.Reuse content