The U.S. Patent and Trademark Office has rejected two key Microsoft patent applications relating to its File Allocation Table file system. But Microsoft officials still hold out hope that the company ultimately will succeed in the quest to patent FAT.

Microsoft officials said their reaction was upbeat because the USPTO did not reject the patent applications on the basis of prior art claims. In fact, according to David Kaefer, Microsoft's director of business development, the USPTO ruled in Microsoft's favor on all of the FAT prior art claims, including the prior art submitted by Pubpat.

If Microsoft successfully commercializes its six FAT patents—we attacked the oldest and narrowest of them—as it is trying to do with hardware manufacturers like those of flash cards and digital cameras that format such file systems manufacturers, then it could be possible for Microsoft to argue that anybody using a free software system that reads and writes to the MS DOS FAT file system also has to pay a royalty.

Microsoft claims it developed FAT in 1976. FAT has become a ubiquitous format, used for data storage and data interchange between computers and digital devices such as cameras and USB memory sticks.