This day in court could shake Microsoft

i4i.png(Ed note Sept. 22: This landmark case comes to another hurdle tomorrow. As a service to readers, a link to expanded background information has been appended to this original article.)
TORONTO — A court has ruled that Microsoft can continue selling Word in the U.S. while it appeals a judgment against it won by i4i, a tiny (by MS standards) but tenacious Toronto software firm. Got that? Owen%2C%20Loudon.jpgMicrosoft may continue selling one of its major products in the world's leading market — but only by leave of the court.
If it hadn't persuaded the U.S. Court of Appeals for the Federal Circuit in Washington last week, Microsoft had until October 10 to redesign its software or stop selling it in the United States. This was the situation after a court in Texas last month confirmed a jury finding that Microsoft had wilfully infringed an i4i patent. Texas awarded damages of US$290-million and slapped an injunction on Microsoft. Now that injunction is on hold until after the appeal, scheduled to begin September 23.
The i4i patent relates to methods of handling codes for content within XML (extensible markup language), which Microsoft adopted for its Word 2003 and Word 2007 versions. Its claim that the i4i patent is invalid was rejected by the court. Word is a central part of the Microsoft Office suite, which generates close to US$20 billion in sales annually for the software gorilla.
Microsoft has won a reprieve. But it could be costly. In the Texas judgment, which started with a $200 million jury award, Judge Leonard Davis tacked on (all US$):
$40 million for Microsoft’s willful infringement;
$144,060 per day from May 21, 2009 (date of the jury award) until the date of the final judgment (Aug. 12);
$37,097,032 of pre‐judgment interest up to May 20, 2009 and $21,102 per day thereafter until Aug. 12;
And "post‐judgment interest as provided for by 28 U.S.C. § 1961 for any time period between the entry of this Final Judgment and the date upon which i4i receives payment from Microsoft as ordered herein."
Would a higher court give any less? Would it be more generous if the appeal fails? Of course, if MS wins the appeal . . .
But i4i isn't sounding worried. As Chairman Loudon Owen (pictured above) put it to Simon Avery of the Globe and Mail, "They can run, but they can't hide. Microsoft's time will eventually run out.” Mr. Owen, a venture capitalist who traces his family's business roots to far eastern trading houses in the early 19th century, provided seed funding for i4i and probably the dose of tenacity that led to such a tweak of the Redmond beak.
Click here for updated and additional information published Sept, 21 by the Globe & Mail.

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