Microsoft to pay millions after patent ruling defeat

Tech giant forced to alter Word software and pay more than $290 million to Canadian firm

Tags: ComplaintMicrosoft CorporationUSAi4i Incorporated
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Microsoft to pay millions after patent ruling defeat Tech giant has to pay more than $290 million to Canadian firm i4i after losing key legal battle
By  Vineetha Menon Published  December 23, 2009

Microsoft, the world's largest software manufacturer, has to pay a small Canadian company more than $290 million after losing an appeal over a patent related to XML technology used in their popular Word software.

The case started in 2007 when i4i sued Microsoft for alleging that the software giant infringed on their 1998 patent for custom XML technology by integrating it into their Word software, starting with Word 2003. In August this year, a United States District Court found Microsoft guilty of the charges and issued an injunction ordering them to pay i4i $200 million in damages and get rid of custom-XML support or stop selling copies of Word.

Microsoft appealed this verdict but lost yesterday's ruling and now has to pay more than $290 million to i4i after additional fees added to the earlier penalty figure. Michel Vulpe, founder of i4i and co-inventor said that it proved their case "...was just and right, and that Microsoft wilfully infringed our patent."

The injunction will take effect in less than a month on January 11th, 2010 and applies only to copies of Microsoft Word 2007 and Microsoft Office 2007 sold in the United States on or after the injunction date. Copies of the same sold before January 11th are not affected and Microsoft clarified that beta versions of Microsoft Word 2010 and Office 2010, which are available for download, do not contain the technology.

"With respect to Microsoft Word 2007 and Microsoft Office 2007, we have been preparing for this possibility since the District Court issued its injunction in August 2009 and have put the wheels in motion to remove this little-used feature from these products,"  Kevin Kutz, director of Public Affairs at Microsoft wrote in a statement to address the issue. "Therefore, we expect to have copies of Microsoft Word 2007 and Office 2007, with this feature removed, available for U.S. sale and distribution by the injunction date."

But Kutz added that Microsoft is still considering its legal options, which could include a request for a rehearing or a writ of certiorari from the U.S. Supreme Court. 

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