A ‘landmark’ injunction was granted against Microsoft on Tuesday, Aug 11th, when the District Court of Eastern Texas granted an injunction against the buying, selling, importing and/or marketing of copies of Microsoft Word, one of Microsoft’s flagship products. Specifically, it bans any version of Word which can open ‘custom XML’ files (these include .DOCX, .DOCM, and .XML files) as these allegedly violate the patent of a Canadian company called i4i. It does however allow the for support and assistance for those products which were sold / licensed prior to the date of the injunction.
Earlier, in late May, 2009, a jury had come to a verdict which held Microsoft liable to pay $200 million in damages (this was considered a ‘reasonable royalty’ by the Court) for infringement of i4i’s US Patent No. 5,787,449 relating to ‘custom XML’ files. Following this, Microsoft filed for dismissal of the verdict of the jury. However, the post trial ruling by Justice Leonard Davis upheld the verdict and ordered Microsoft to pay further amounts of $40 million for willful infringement, post-verdict damages of $144,060 per day from May 21st, 2009 till the date of the current judgment, pre-judgment damages of $37,097,032 up to May 20, 2009 and $21,102 per day thereafter until the date of the current judgment. This brings the total to almost $300 million. The court has given Microsoft 60 days to comply with this order.
At the crux of the suit is the concept of ‘custom XML’, which unfortunately, after reading many definitions by Microsoft as well as others, I could just get a vague idea about. As far as I can tell, it seems that the patent is one which can be worked around. For more details on this, see the explanation in this article. If anyone has any more information on this, please do share in the comments section.
Microsoft, expectedly has said that they will appeal this decision, and it is unlikely that they will stop progress on their Office 2010 version which is due to be released next year. Going by past case history, it won’t be surprising to see a settlement arrived before the completion of the appeals process.
In CNET’s interview with Loudon Owen, the chairman of i4i, he says that he does not want to see MS Word pulled from the shelves nor stop Microsoft’s business, but he would be happy to see Microsoft work around the infringing patent. It is also interesting to note that the Eastern District Court of Texas has a record of sorts for attracting patent litigation. According to New York Times, this court has a record of 78% wins compared to a national average of 59% wins.
As pointed out by IP Watchdog, there is a line in the judgment stating that “Microsoft Word 2003, Microsoft Word 2007, and Microsoft Word products not more than colorably different from Microsoft Word 2003 or Microsoft Word 2007 (collectively “Infringing and Future Word Products”)…”. This line is probably in the context of the Windows 95/Windows 98 incident. Following the antitrust monopoly suit which succeeded against Microsoft for their product Windows 95, they promptly launched the next version of Windows – Windows 98, claiming that the order was not applicable to this new version of Windows. This line was probably inserted to ensure that a similar course of action is not repeated.
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