Software product activation [an anti-piracy technology] that you come across in Office XP, Windows XP or AutoCAD is found to be pirated itself. Z4 Technologies, founded by David Colvin, had patented this type of copy-protection technology much before than Microsoft or Autodesk.

Microsoft and Autodesk will therefore have to shell out millions of dollars for using Product Activation that violates Z4 patents. Microsoft and Autodesk both say they don't use Colvin's inventions and developed their own anti-piracy software before he filed his patent applications in 1998.

The two Z4 patents at issue involve passwords and codes assigned to each copy of an authorized version of software, obtained from the seller, and then possibly a second password to continue use of the software.

Z4 initially asked Microsoft for as much as $1 billion but had to settle for $115 million. Autodesk will pay another $18 million to Z4. As far as I know, Adobe also requires product activation for Photoshop and Premiere Pro. Why were they missed out in the suit ? Activation Required.