News

Court Grants Stay in Microsoft vs. i4i Patent Case

• By Kurt Mackie
• 09/05/2009

A U.S. federal appeals court on Thursday stayed an injunction against Microsoft, pending appeal, in a patent dispute involving Microsoft Word.

The stay temporarily suspends a final judgment issued by Judge Leonard Davis of the U.S. District Court for East Texas until further arguments are heard in the appeal. Oral arguments are scheduled for Sept. 23.

Judge Davis ordered Microsoft to pay more than $240 million in damages and penalties for violating a patent held by Toronto-based i4i LP. The case involves so-called "custom XML" used in Word and Office. In addition, the judge ordered Microsoft to stop selling copies of Word in the U.S. market by Oct. 10 (60 days after the final judgment) if Word uses i4i's patented technology.

Microsoft filed papers appealing the final judgment last week. The company disputes the patent violation and the judge's performance in the case. PC makers Dell and HP filed amicus curiae papers backing Microsoft, suggesting that the restrictions on Word sales would hamper their businesses.

i4i plans to respond to Microsoft's appeals filing on Sept. 8. Loudon Owen, i4i's chairman, said that Microsoft was just using "scare tactics" in the case.

"Defendant-Appellant Microsoft claims it may have to stop distributing Word and Office in the U.S. market until it can redesign both products," Owen said in a released statement. "Microsoft’s scare tactics about the consequences of the injunction cannot shield it from the imminent review of the case by the Federal Circuit Court of Appeal on the September 23 appeal."

Andrew Updegrove, cofounder of Boston-based technology law firm Gesmer Updegrove LLC, doesn't think that sales of Microsoft Office and Word will be slowed down by this court case.

"I'll wager you that no one will have any more trouble buying Office the day after the 60 day pendancy period runs out than they did before," Updegrove wrote in his blog. "That's because the key to the solution is also all about money, calculated under three alternate paths."

Those three paths for Microsoft include reaching a settlement with i4i, continuing to sell Office and Word in defiance of the court, and coming up with a technology workaround. Whichever path Microsoft chooses, it will emerge as a winner, Updegrove argued. Even if a settlement is reached, it may be for less than what the judge awarded, he added.

The technology considerations in the case are moot, according to Updegrove.

"In short, this isn't about XML, or the Commons, anything else high minded -- it's a game of high-stakes, commercial chess, being played out by two obviously skillful opponents."