Microsoft has 60 days to halt sales of Word

by Steve Ragan - Aug 12 2009, 23:43

An Eastern Texas judge has ordered Microsoft to stop “selling, offering to sell, and / or importing in or into the United States any... Word Products that have the capability of opening a XML, DOCX, DOCM file containing custom XML.” Microsoft has 60 days to comply, but the smart money is on this never happening.

The XML debate between Microsoft and Toronto-based i4i Inc. goes back to May 2009, when i4i received a $200 million USD settlement verdict against Microsoft after eighty days of trial time for patent infringement. During the trial, i4i claimed that certain versions of Microsoft Word, both the 2003 and 2007 editions, infringed on patent no. 5,787,449, held by i4i in regard to the use of XML.

“A system and method for the separate manipulation of the architecture and content of a document, particularly for data representation and transformations,” describes i4i's patent. 

In short, the patent relates to basic XML document editing. The jury that heard the case agreed that, since Microsoft Word 2003 and 2007 have the ability to edit XML, i4i was owed compensation for patent infringement.

Making a confusing and messy trial even worse is patent no. 7,571,169, which was issued to Microsoft just last week and centers on a “Word-processing document stored in a single XML file that may be manipulated by applications that understand XML.”

This is messy because two companies now have a patent for essentially the same thing. While i4i was awarded its patent first, the patents held by both companies are not identical, yet this demonstrates serious issues within the patent office. XML is an open standard that shouldn’t be allowed to be patented anyway. Neither i4i nor Microsoft should hold any claim over it.

After the settlement was awarded, i4i was within its rights to ask that sales of Word be blocked, but no one expected the judge in the case to actually issue an injunction.

On Tuesday, Judge Leonard Davis ruled that: “Microsoft Corporation is hereby permanently enjoined from performing the following actions with Microsoft Word 2003, Microsoft Word 2007, and Microsoft Word products not more than colorably different from Microsoft Word 2003 or Microsoft Word 2007...”

The listed actions include the sales of Word products, using Word products, instructing or encouraging anyone to use Word products, and to open or edit an XML file containing custom XML code.

In addition, Microsoft was ordered not to offer support or assistance to anyone on how to open or edit an XML file. Microsoft is also not allowed, according to the court documents, to test, demonstrate, or market the abilities of Word to open or edit XML files. Moreover, the injunction covers Word 2008 for Mac and Word 2010, which is a part of the upcoming 2010 version of Office.

The judge's ruling added a further kick to the ribs because, in addition to the $200 million USD settlement verdict in May, Microsoft will now need to pay another $40 million USD for willful infringement, plus $37 million USD in “prejudgment interest”.

The court in the case, The U.S. District Court for the Eastern District of Texas, is known for delivering positive results to companies looking to sue over patent rights -- and almost all patent-based lawsuits wind up here. Most of them end in favor of the company that filed the lawsuit to begin with. However, no matter how silly the injunction appears, it was ordered and now Microsoft has 60 days to act.

“We are disappointed by the court's ruling,” a spokesperson said. "We believe the evidence clearly demonstrated that we do not infringe and that the i4i patent is invalid.” Microsoft has also said it will appeal the ruling,

Microsoft could settle, of course, and change the way Word works, or it can ask for a stay pending appeal -- the more likely course of action. Most legal experts who have weighed in on the case agree that if Microsoft asks for a stay of injunction, the U.S. Court of Appeals will grant it.

While Microsoft has the ability to issue a patch to comply with the rulings, stripping Word and other editing software of the ability to edit and open XML files, there is no way it would do this.

Microsoft Word is the heart of the Office product line, and there is simply too much money invested in it. Another unlikely outcome, one that would be ironic to say the least if it did happen, is that Microsoft could just flat-out purchase i4i Inc.

No one knows the final outcome in this case. All that is certain is that Microsoft will appeal, and the odds are it will win in the end. Once this is over, don’t be surprised if Microsoft opens a new mini-division aimed directly at XML, lending it the name tooth4tooth.

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