Microsoft Verses I4i Case Could Change Patent Law

By Kerrie Spencer, staff technology writer – June 1, 2011

It is not often that a small Canadian company gets the chance to change the course of patent laws in the United States.

This is a really interesting lawsuit. It is a faceoff between i4i in Canada and mega-giant Microsoft, based in Redmond, Calif. – you know, the guys with the deep pockets when it comes to lawsuits. The most interesting thing about this case is that should i4i win this time, and it already has in several courts, the decision could very well change how exclusive technology patents are protected.
Based in Toronto, i4i has been doing battle with Microsoft since 2007, and why not, since this case involves a big chunk of change. Thus far, two courts have already ruled that Microsoft did use i4i’s technology – specifically in its Word software. In fact, an earlier ruling awarded the Canadian company $290 million in 2009. [1]

At issue in the earlier cases was the Custom XML-related patents. In fact, you may recall that a court blocked the sale of MS Word because of this court case. Microsoft was told it had 60 days to stop selling MS Word. Microsoft said the court’s decision would obstruct the sales of MS Office and ultimately, threaten the industry. [4][5] That was a bit of a tempest in a teapot, but no doubt the point was made that you cannot swipe someone else’s technology and get away with it.

Microsoft has never been noted to pack up their tent and leave, so it is not a surprise they are challenging the ruling and the award. Of course, i4i’s owners want the U.S. Supreme Court to stand by the current patent laws when deciding this case.

Wanting the Supreme Court to uphold current patent laws makes sense when you stop to think about it. If you are granted a patent, and it is not enforceable, how much meaning does it have? In other words, as i4i’s chairman says, “Why have a patent if it’s useless?” [1] Sometimes, it is the simplest questions that have the biggest impact in lawsuit outcomes, and the simplest questions that create landmark turning points in the current law.

Ironically, i4i supplied the U.S. patent office with its patented technology when the company decided it was time to revamp its website to make patent submissions easier. It is not hard to understand why, if i4i does not win, that it will be a big kick in the rear end for creators and inventors. On one side of the fence in this battle, squarely in i4i’s camp, are hefty numbers of inventors, biotech companies, the U.S. government and venture capitalists. You can probably guess who is on the other side of the fence siding with Microsoft – Apple, Google and Intel Corp. Why? Because it will be easier to quash patents if Microsoft wins.

It is not too much of a stretch of the imagination to view this battle between David and Goliath as one with global ramifications and not just with lasting repercussions in the area of intellectual property law in the U.S. Almost half of all the patents granted in the U.S. go to non-U.S. residents. That kind of puts things into perspective about the potential ramifications of this case.

How did this whole thing get started? It all began when a Texas court handed i4i a judgment in their favor, saying Microsoft had infringed on several of their XML patents. That was the $290 million award. That victory was followed by an injunction against the further sales of custom XML capable versions of Word. It was questionable from the beginning if the injunction would actually halt sales of MS Word. [4]

Microsoft hit the panic button and appealed the injunction. Interestingly, HP and Dell threw their weight behind Microsoft and said making them alter MS Word would mean time consuming and expensive tests of machines using the software. Microsoft got a stay on the injunction and not surprisingly, sales of MS Word continued unabated.

When the dust had barely settled over this flap, Microsoft wanted a new trial, and said they did not go to Canada to steal XML technology. I4i and Microsoft met again and i4i said they had given Microsoft more than enough time to modify Word. On its part, Microsoft has said they have not infringed on any existing patent. Since then, the U.S. Federal Circuit of Appeals has upheld the verdict and industry analysts have tended to side with i4i.

What comes next? Who knows. The one thing you may be sure of is that this case will have some serious ramifications for U.S. patent law. It is not all that often that a company the size of Microsoft gets called out on the carpet. Perhaps this is something that needed to happen to defend the rights of those with exclusive patents. What do you think?

Sources
1] http://news.ca.msn.com/top-stories/cbc-article.aspx?cp-documentid=28417737

[2]http://www.google.com/hostednews/canadianpress/article/ALeqM5h-Xvh4TLxDxbVaraEmTmUjAl-9sQ?docId=6596890

[3]http://www.cbc.ca/news/technology/story/2011/04/18/tech-i4i-microsoft-supreme-court.html

[4] http://www.itworldcanada.com/ContentPage/i4i-microsoft-legal-battle

[5] http://ostatic.com/blog/microsoft-vs-i4i-much-ado-about-nothing

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