Microsoft’s protracted patent battle with 30-man strong Canadian company i4i is finally over. The U.S. Supreme Court has unanimously turned down Microsoft’s appeal against a lower-court ruling ordering it to pay $290 million in damages for infringing one of i4i’s XML-related patents with certain versions of its popular word processing software. More after the jump.
Microsoft's legal battle against Canadian firm i4i has been a complete disaster from the very outset. Last August, Microsoft was ordered to pay i4i $290 million in damages by a federal judge in the U.S. District Court for the Eastern District of Texas after certain versions of Word were found to be infringing on an XML-related patent held by the Canadian firm. The fine was accompanied by an injunction barring the sale of infringing versions of the popular word processing software.
All subsequent attempts to turn the tide also proved unsuccessful. Now, Microsoft has filed a writ of certiorari with the U.S. Supreme Court, asking it to review the lower court's decision. This hasn't come as a huge surprise to i4i, which is confident that it will once again “prevail” over its storied rival.
The litigation gods don't seem to be favoring Microsoft at the moment. A U.S court of appeals dashed all its hopes of a turnaround in its legal battle with Canadian firm i4i when it upheld a previous ruling against the Redmond-based company on Tuesday. In August, a U.S District Judge had ruled that certain versions of Microsoft Word encroach upon i4i's patents and consequently slapped the software giant with a $290 million fine, besides placing an injunction on the sale of all infringing versions of Word in the U.S.
The appeals court had stayed the injunction in September until the matter was in consideration. But now that it has affirmed the previous ruling against Microsoft, there is very little the company can do apart from purging Word 2007 and Office 2007 of the features that violate i4i's patents. According to a Reuters report, the company is already taking the necessary corrective measures.
However, the company is also exploring other legal options, including a rehearing by a full panel of judges or a Supreme Court review, according to its spokesperson Kevin Kutz. A spokesperson for i4i said it is “pleased with the court's decision to uphold the injunction, an important step in protecting the property rights of small inventors.” This small inventor with a vindictive name certainly has every reason to be pleased.
"Without prejudicing the ultimate determination of this case by the merits panel, the court determines based upon the motion papers submitted that Microsoft has met its burden to obtain a stay of the injunction," the court said.
After Judge Davis had granted the injunction to i41, Microsoft evinced fear that it could lead to "irreparable harm.” It most dreaded the fact that the injunction could keep the “centerpiece of its product line out of the market for months.” Dell and HP had also backed Microsoft in their respective amicus curiae (friend-of-the-court brief) filings.
Upholding i4i’s patent infringement claim against Microsoft, a US Federal court judge placed an injunction on Microsoft Word on August 11, 2009. Judge Leonard Davis ordered that Microsoft pay the Canadian company i4i $290 million in damages and stop the sale of Word in the US, within 60 days of the pronouncement of the order, until the dispute is fully resolved. Microsoft Word’s default file format Office Open XML is at the epicenter of Microsoft’s dispute with i4i. The XML-based file format infringes i4i’s US patent number 5787449.
“Microsoft and its distributors face the imminent possibility of a massive disruption in their sales. If left undisturbed, the district court’s injunction will inflict irreparable harm on Microsoft by potentially keeping the centerpiece of its product line out of the market for months. The injunction would block not only the distribution of Word, but also of the entire Office suite, which contains Word and other popular programs," the company’s filing reads. Although Microsoft can take corrective steps by disabling the XML feature, it will have to cough up a lot of money for that exercise.