In its early days Microsoft, oft ignored the open source movement, instead pushing for proprietary standards.  However, more recently the company has made a practice of embracing open standards and then "extending" them in ways that tend to tie them to the Windows operating system, according to critics.

Thus was the case with XML collaborative content standards developed by Toronto-based i4i.  Microsoft took the approach and used it in Word 2003 and Word 2007 to provide a means of controlling the appearance of Word files via embedded tags.  In doing so they modified the XML without permission, in what the courts decide was a clear violation of i4i's patent.

After a fierce court battle, federal court in Texas has found Microsoft guilty of infringing the patent and has ordered it to pay i4i $200M USD in damages.  Microsoft spokesman David Bowermaster told reporters that his company plans to appeal the ruling in Federal Court.

The fine is among the biggest ruling arising from a suit from a private entity.  The only one to surpass it in recent history was a $388M USD ruling by a Rhode Island federal court, over Microsoft's infringement of Singapore-based Uniloc's anti-piracy software.  The court ruled that the technology which formed the basis of the Windows Product Activation (WPA) antipiracy mechanism was clearly an infringement of Uniloc's patents.  Also, Z4 Technologies, in 2004, sued Microsoft over the technology in WPA and won $115M USD in a Texas court.

Microsoft has also started its fair share of intellectual property-based lawsuits.  Earlier this year it sued open-source GPS maker TomTom, eventually securing a hefty settlement.  Microsoft has recently claimed that as many as 235 of its patents are infringed by open source software, something it continues to try to fight with litigation.

The company has fared less successfully with government regulators, though.  The EU has fined Microsoft over $1B USD for antitrust violations.  The EU is currently pursuing new charges against the company.