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2008: Decision Year for RIAs - October 20-22, 2008 San Jose


Microsoft Seeks Stay of Word Injunction
It wants the stay while it appeals the decision

Microsoft Tuesday filed an emergency motion with the U.S. Court of Appeals for the Federal Circuit in Washington looking for a stay of the permanent injunction ordering Word and Office off the U.S. market by October 10.

It wants the stay while it appeals the decision.

The order came down late last Tuesday as part of a verdict that Word infringes a custom XML patent held by an obscure Canadian ISV called i4i.

The plaintiff-favoring Texas district court that issued the injunction also hit Microsoft with $290 million in damages, $200 million by way of compensation and another $90 million for willfulness. It also refused to stay its injunction.

Claiming a "classic case for a stay pending appeal," Microsoft wants an expedited schedule and i4i's brief opposing the stay filed next week.

Its motion claims the Texas court made "several fundamental legal errors" and that redesigning Word to "remove an obscure functionality" used by only a few people - that it may ultimately be found not to infringe - would "irreparably harm" Microsoft - underscore irreparably - cause "massive disruption" in the sales of distributors such as Best Buy and OEMs such as HP and Dell as well "strand" users whereas i4i would not be injured - at least not in a way that couldn't be remedied by damages.

Microsoft claims the Texas court - in an "abuse of discretion" - went over the top in issuing the injunction rather than simply ordering Microsoft to pay an ongoing royalty.

It says the only reason for an injunction is to forestall future injury and i4i couldn't prove past harm let alone future harm since its Word add-on business went up when the offending Word 2003 came to market.

i4i apparently alleged loss of specific customers too but Microsoft says the evidence i4i presented only showed it losing to other ISVs, not Microsoft, and it says i4i failed to show that the lost sales were caused by Microsoft's alleged infringement rather than by all of Word's non-infringing features.

In fact it claims that i4i would be hurt by pulling Word off the market since it's an add-on.

The motion notes that the Patent and Trademark Office "provisionally rejected" the i4i patent on re-examination as "anticipated and obvious."

It also says that the district court disallowed the first 13 claims in the i4i patent for "indefiniteness" at the Markman hearing, leaving three patent claims. But Microsoft claims the court then misconstrued the i4i patent and its purpose, which it says reeks of independent manipulation of a custom XML tag, something Word can't do.

It also claims that prior art connected with SGML completely invalidates the i4i patent by separating metacodes from mapped content and creating a metacode map, which is why, it says, the PTO, which was previously unaware of the SGML editors Rita and DeRose, has provisionally thrown the i4i patent out.

It argues that the validity of the patent should be determined before Microsoft is forced to change Word, a cost that will be passed on to the consumer.

Microsoft mentions in passing that $200 million in damages is based on a royalty of $98 a copy, "more than the retail price of some editions of Word."

Apparently at most 2% of American Word users since 2003 - maybe 1.8 million or 2.1 million people - have ever used the allegedly infringing functionality.

Microsoft, which claims any workaround would take months, is apparently prepared to see the case through to the Supreme Court.

About Maureen O'Gara
Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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