“You know, Microsoft, when you want to flat out steal someone’s product, it’s a good idea to…actually it is never a good idea for Microsoft to try to steal anything.” – Grantster
Stac Electronics (the maker of Stacker) was one of the many fly-by-night-turned-big-time companies of the late 80’s, early 90’s. They took your precious hard drive and doubled or even tripled the amount of free space. It did this by compressing and decompressing programs on the fly. Kinda like zipping and unzipping files for you automatically. Why was this ever handy? Well, as hard as it is to believe, hard drives weren’t always 2 terabytes in size. They were actually pretty small. The first hard drives were 10 Meg (yes I said MEG!). This was roughly the amount of space that is on 7 of today’s floppies (sorry, I realize many of you have never used a floppy). You could store jack and crap on your hard drive. Therefore, automatic compression software was quite handy. Unfortunately, if your drive ever got corrupted, it destroyed exponential amounts of data due to the way the drive is compressed. Oh, well, details…details. Nevertheless, the was quite a market for this Stacker product.
Then came Microsoft.
They couldn’t be satisfied with having a monopoly on operating systems. They wanted what little market that Stacker had built up for themselves. Microsoft added data compression software to their MS-DOS 6.0 product. It gets worse; Microsoft bought the rights for the software from some little no-name company. Even worse than that, the company that Microsoft bought it from (I think the company name was Warez Bros. Inc.) reverse-engineered the Stacker compression algorithm. OOOOOOOOOPS.
Then came the lawsuit.
Stac Electronics (the makers of Stacker) filed a lawsuit again Microsoft for $120 million. Duh. Claiming that the “DoubleSpace” compression software inside MS-DOS 6.0 was a patent infringement. Duh. Then, Microsoft counter sued Stac Electronics. Huh? Yes, that’s right, Microsoft counter sued stating that Stac Electronics “misappropriated a pre-loading trade secret” revealed to them by Microsoft. What this means is that Stac learned of an undocumented DOS call revealed to them by Microsoft and used it. That’s so dumb, why should Microsoft be able to put undocumented calls in their OS, calls that WOULD BE USEFUL, and then sue anyone who used it? If you’ve ever read the book Undocumented DOS you’ll know why this kind of crap royally hacks me off. Microsoft won the countersuit, which was in the neighborhood of $13 million. This was absolutely ludicrous. How could Microsoft successfully counter sue? So what if they reverse engineered DOS. They were just trying to figure out how to get their crap to work with Microsoft’s crap. Microsoft’s product actually FREAKIN’ STOLE PROGRAM CODE FROM STACKER!!!! Microsoft should have had no legal basis for this countersuit. And shame on whoever the heck let Microsoft win this one.
Well, when all of the smoke finally cleared, Stacker discontinued production. Disk compression finally became passe. Microsoft is still in business. Stac is not. However, to the credit of the owners of Stac Electronics, they made an unprecedented display of compassion when they went out of business. They sold their assets to a company called Alutris and returned all available cash back to the stockholders. How many public companies have ever done that?
Stac Electronics
Microsoft found guilty of infringing on patent held by Stac Electronics.: An article from: Software Industry Report
Judge formally censures Microsoft for infringing on Stac Electronics patents. (Edward Rafeedie): An article from: Software Industry Report
Microsoft Rising: …and other tales of Silicon Valley (Perspectives)
Grantster.com - The WORST In Computer History - Returns! 
encryption is for encoding files. not compressing.
You are right. I created this article a long time ago and I would use the two terms interchangeably. Obviously, that was incorrect. I’ve updated the post.
You kinda left out the settlement with Microsoft that netted roughly $80M to Stac.
Thanks for pointing that out. Yes, it did kind of work out for them in the end.
I worked for STAC Electronics during the time of the Microsoft lawsuit. The software engineers at STAC Electronics showed a bunch of us employees the source code from both DoubleSpace and Stacker 1.0 side-by-side. They were identical. Microsoft didn’t even bother to remove the STAC Electronics Copyright notices embedded into the source code.
That is amazing. When I wrote this eons ago, I never thought I would have a STAC insider see it, much less comment on it.
When you look at the bigger picture, it’s surprising the number of blunders that Microsoft made in MS-DOS 6.0. I think they were scared that DR-DOS was going to take over their market share (as seen in Bill Gates internal memo). In reality, DR-DOS, albeit superior, was probably not going to put much of a dent because it still little to no brand recognition. But Digital Research bundled a version of SuperStor disk compression software with version DR-DOS 6.0 and Microsoft thought they had to compete. In hindsight, it would’ve been much better for them to buy STAC outright, but I guess they decided to go the less noble route of software piracy.
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Thanks for writing this article. Thank you Robert for your comments.