Microsoft asks court to revisit its ‘Word’

Microsoft Corp on Friday asked a federal appeals court to take a second look at its ruling last year in December that upheld a $290 million patent infringement lawsuit against the company and banned it from selling the current versions of its flagship Word software.

On December 22, the Federal Circuit panel affirmed a previous ruling that Microsoft knowingly infringed i4i’s patent on custom XML technology when Microsoft incorporated it into Word 2003 and 2007. (XML is a ‘markup language’ that adds extra data to documents). The Toronto-based i4i was awarded $290 million in damages, and “prohibited Microsoft from selling or importing to the United States any Microsoft Word products that have the capability of opening .XML, .DOCX or DOCM files (XML files) containing custom XML”. XML (Extensible Markup Language) is a set of rules for encoding documents electronically.

Microsoft said it has been preparing modified versions of the affected programs that should be ready when the injunction goes into effect (January 2010), allowing sales to continue uninterrupted. Hence, copies of Word 2007 sold after Monday will not infringe, nor will Word 2010 when it is released in June, reaffirmed Microsoft.

So now what on the Redmond-based company wants to court to decide, money perhaps? Microsoft brought to the court notice that court brief that the $290 million verdict was the largest ever sustained on appeal in a patent infringement case. “The damages award here is unprecedentedly large, yet the panel decision – like the district court – declined to determine whether it is excessive,” Microsoft termed the damages as “jackpot justice” and also objected to the hypothetical calculations that were used by i4i and its attorney to arrive at the compensation figures.

In its decision, the appeals court said I4i lost “market share, brand recognition and customer goodwill” as a result of Microsoft’s infringement. Microsoft, which doesn’t agree that it violated I4i’s patent rights, nonetheless said that I4i now makes software that complements rather than competes with Microsoft, so there’s no “future harm” to I4i that has to be protected through a court order. Besides, it also said that a small fraction of its ‘Word’ users actually use the XML feature, so the revenue impact would be miniscule.

I4i Chairman Loudon Owen said the filing was “anticipated” and “we continue to be confident that we will prevail.”