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Microsoft Loses i4i Patent Appeal; All Sales of Word/Office Must Cease by Jan. 11

December 22, 2009

Introduction

Today, in the United States Federal Circuit Court of Appeals, in Washington D.C., a panel of three judges returned their ruling on the appeal of i4i v. Microsoft and upheld jury’s

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verdict and all the findings of the August 11, 2009 Final Judgment that ruled in favor of i4i and found that Microsoft had willfully infringed i4i’s U.S. Patent # 5,787,449, issued in 1998. That decision means that we would see Microsoft Word and Office banned from all new sales starting January 11, 2010.

If you’ll recall, Microsoft lost a patent infringement suit against XML specialists ” i4i” this year when it was found that Word’s handling of .xml, .docx, and .docm files infringed upon i4i’s patented XML handling algorithms, but the injunction against further Word sales was put on hold pending the results of this appeal.

Now that Microsoft has lost once again, expect either another appeal and request for the injunction to be stayed, this time to the Supreme Court, or for a settlement between these two that would end this whole mess right now.

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Note: Find the official press release here. It is the basis for this story.

Juicy Details

Tuesday, federal appeals court ordered Microsoft Corp. to stop selling its Word program by January 11, 2010 and pay a Canadian software company, i4i Inc., about $290 million for violating a patent, upholding the judgment of a lower court.

But people looking to buy Word or Microsoft’s Office package in the U.S. won’t have to go without the software. Microsoft said today it expects that new versions of the product, with the computer code in question removed, will be ready for sale when the injunction begins on Jan. 11.

Toronto-based i4i Inc. sued Microsoft in 2007, saying it owned the technology behind a tool in the popular word processing program. The technology in question gives Word users an improved way to edit XML, or code that tells the program how to interpret and display a document’s contents.

However, today a Texas jury found that Microsoft Word willfully infringed on the patent. Microsoft appealed that decision, but the U.S. Court of Appeals for the Federal Circuit upheld the lower court’s damage award and the injunction against future sales of infringing copies of Word.

Loudon Owen, Chairman of i4i, says, “We couldn’t be more pleased with the ruling from the appeals court which upheld the lower court’s decision in its entirety. This is both a vindication for i4i and a war cry for talented inventors whose patents are infringed.” Mr. Owen adds, “The same guts and integrity that are needed to invent and go against the herd, are at the heart of success in patent litigation against a behemoth like Microsoft. Congratulations to our entire team who provided such dynamic leadership, courage and tenacity!”

Michel Vulpe, founder and co-inventor of i4i, says, “This ruling is clear and convincing evidence that our case was just and right, and that Microsoft wilfully infringed our patent.” Mr. Vulpe adds, “i4i is especially pleased with the court’s decision to uphold the injunction, an important step in protecting the property rights of small inventors. We will continue to fully and vigorously enforce our rights and we invite all potential customers interested in custom XML to contact us.”

Microsoft said it has been preparing for such a judgment since August. Copies of Word and Office sold before Jan. 11 aren’t affected by the court’s decision. And Microsoft said it has “put the wheels in motion to remove this little-used feature” from versions of Word 2007 and Office 2007 that would be sold after that date.

“Beta” or test versions of Word 2010 and Office 2010, expected to be finalized next year, do not contain the offending code.

Microsoft says it may appeal further (and most likely will), asking for either a rehearing in front of the appeals court’s full panel of judges or in front of the U.S. Supreme Court.

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What’s more, the patents involved here don’t cover XML itself, but rather the specific algorithms used to read and write custom XML — so OpenOffice users can breathe easy, as i4i has said the suite doesn’t infringe. Existing Office users should also be fine, as only future sales of Word are affected by the ruling, not any already-sold products.

Conclusion/Recap

i4i, Inc. has won an appeal that forces Microsoft to stop all sales of Microsoft Word and Office by January 11, 2010, due to “willfully infringing” on a patent that covers XML technologies, such as .xml, .docx, and .docm files

Microsoft says it’s moving quickly to prepare versions of Office 2007 and Word 2007 that don’t have the “little-used” XML features for sale by January 11, 2010, and that the Office 2010 beta “does not contain the technology covered by the injunction,” which can be read in a number of ways.

It’s also considering an appeal, so we’ll see what happens next — stay tuned to TechWorthy for more.

Today, in the United States Federal Circuit Court of Appeals, in Washington D.C., a panel of three judges returned their ruling on the appeal of i4i v. Microsoft and upheld jury’s verdict and all the findings of the August 11, 2009 Final Judgment that ruled in favor of i4i and found that Microsoft had willfully infringed i4i’s U.S. Patent # 5,787,449, issued in 1998.
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