Microsoft loses appeal in i4i patent case, ordered to alter Ms Word

A US federal appeals court has upheld a patent infringement judgment against Microsoft that forbids the software giant from marketing current versions of its popular word processing program, Ms Word.

A Texas jury had earlier delivered a $200 million patent-infringement verdict in favor of Toronto-based i4i Inc. i4i accused Microsoft of infringing on its patent for technology relating to XML, which Microsoft termed an “obscure functionality.” Microsoft now has till January 11, 2010 to amend its Ms Word product or cease sales. Ms Word typically ships as a part of Microsoft’s Office software suite.

In a statement, Kevin Kutz, Director of Public Affairs for Microsoft said that his company was “moving quickly to comply with the injunction,” while stating as matter-of-fact that the injunction applied “only to copies of Microsoft Word 2007 and Microsoft Office 2007 sold in the US on or after the injunction date of January 11, 2010. Copies of these products sold before this date are not affected.”

Kutz said that with respect to Microsoft Word 2007 and Microsoft Office 2007, Microsoft has been preparing for this possibility since the District Court's injunction in August 2009 and has initiated processes to remove this “little-used feature” from these products. Microsoft said it expects to have copies of Microsoft Word 2007 and Office 2007 sans this feature available for US sale and distribution by the injunction date. Its statement said that the beta versions of Microsoft Word 2010 and Microsoft Office 2010 currently available for download do not contain the technology. Kutz also said Microsoft was still considering its legal options including a request for a rehearing by the Federal Circuit Court of Appeals en banc or a request for a writ of certiorari from the US Supreme Court, which reports quoting legal experts said would not have any impact on the outcome of the case.

Damning Microsoft's appeal, the court said i4i was practicing its patent and lost market share, brand recognition and customer goodwill because of Microsoft's infringing acts. The district court had found Microsoft to have captured 80 percent of the custom XML market with its infringing Word product, “forcing I4i to change its business strategy.” The verdict has since balooned to $290 million as the court upheld the trial judge’s decision to add $40 million for intentional infringement and another $50 million for post-verdict damages and interest.