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Company also says that the ban will cause it "irreparable" harm

I4i's victory in its patent infringement case against Microsoft was a slap in the face for the Redmond juggernaut.  Not only did a judge order $290M USD in damages be awarded to i4i for Microsoft's violation of its XML patents, but it also ordered Microsoft to stop selling Word, in its current form, until a final verdict is reached.  Word currently uses the Office Open XML (OOXML) format, which infringes on i4i's patent.

As the days roll by and Microsoft's 60-day compliance windows closes, the company is pleading with courts to lift the injunction.  It says that if the injunction is not lifted it will likely be forced to stop selling Microsoft Office for several months. 

Writes Microsoft's defense team, "Microsoft and its distributors face the imminent possibility of a massive disruption in their sales. If left undisturbed, the district court’s injunction will inflict irreparable harm on Microsoft by potentially keeping the centerpiece of its product line out of the market for months. The injunction would block not only the distribution of Word, but also of the entire Office suite, which contains Word and other popular programs."

Some are puzzled, though, as to why Microsoft would stop selling Office, rather than simply changes it file format and distinguishing between the current and XML-less editions.  States Barry Negrin, a partner with the New York firm Pryor Cashman LLP who has practiced patent and trademark law for 17 years, "All Microsoft has to do is disable the custom XML feature, which should be pretty easy to do, then give that a different SKU number from what’s been sold so it’s easy to distinguish the two versions."

In the unlikely event that Microsoft does indeed carry through on its claim to stop selling Office, it could prove a headache for consumers and businesses, who rely on the software's functionality.  However, light-weight alternatives such as Open Office 3 (which nears Office 2007 in functionality) and Google Docs could get a brief boost if Microsoft Office disappeared for several months -- a prospect that has some excited.

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RE: Interesting...
By DOSGuy on 8/20/2009 8:41:40 PM , Rating: 2
But it's pretty bizarre bluster. When I first heard about the injunction, I assumed that Microsoft would either buy a license from I4I to continuing selling Word, purchase the patent from them, or buy out the company. I4I would obviously agree to one of those options since, not having a competing product, they gain nothing from the injunction. Microsoft's admission that they will have to stop selling Office for months only raises how much money I4I can demand.

Since this admission obviously hurts their bargaining position, the only explanation I can come up with is that Microsoft is trying to scare the courts with the prospect of taking Microsoft Office away. And yes, I realize that, as a publicly traded company, Microsoft is obliged to disclose this potentially massive hit to their balance sheets, but it seems like they could have warned the public in a more subtle way. Announcing in such straightforward language their intention to pull Office seems almost like a threat.

RE: Interesting...
By Motoman on 8/20/2009 8:52:31 PM , Rating: 2
It is a threat. They're bluffing. They're hoping they can just intimidate the judge into doing what they want.

What MS needs is precisely not to get what they this case, anyway. If they did knowingly break a patent, well, they need to make amends. If the patent is unenforceable, that will come out in the wash. They also need to not be able to bully a federal judge around...there's no good that can come out of that, in any way.

RE: Interesting...
By gstrickler on 8/22/2009 1:30:16 AM , Rating: 2
When you read something as absurd as this, you have to start asking questions. Why would MS make such a statement?

Option 1: They can't or are unwilling to pay the $290M? Absurd, it's practically pocket change to MS. They've got billions in cash and liquid assets, they could pay it in 24 hours if they had to.

Option 2: They can't make the required changes in time? Preposterous, they make emergency security updates, test them, and release them as critical updates in under 30 days when it's important enough. Additionally, they've known they could lose this for months or longer, they have a contingency plan that involves disabling the offending code, and if they don't, their shareholders should sue the Executives and Board of Directors for failing to perform their fiduciary responsibilities. They've probably written and tested the change already.

Option 3: They want to delay payment to i4i as long as possible and make it as financially painful as possible for i4i? A common tactic. Very probable, but not the main reason.

Option 4: It's a bluff? Playing chicken with the a judge who has already ruled against you is generally not a smart move. Despite all the stupid mistakes to come from MS, they're not stupid, especially when it comes to legal issues. Remember, Bill Gates father is a lawyer. I think it is a bluff, but you have to look deeper to see why.

Key piece of info - 60 Days from the Judge's order puts us into mid October, which is precariously close to the Christmas and end-of-year budget season whose sales are critical to distributors, retailers, and OEMs. They are the ones who would suffer "irreparable harm".

Stopping sales of Word and Office will hurt MS's OEMs, distributers, and retailers more than it will hurt MS. Stopping sales of Word and Office for 30-60 days will have a temporary impact on MS's cash flow, but most end-users will either rush to buy it before sales are suspended, or wait until they resume, and MS will end up selling about the same number of copies. Net damage to MS, very little.

However, if the OEM's can't offer the discounted OEM versions pre-installed on a computer, those OEMs lose sales of Office and/or have delayed sales of computers. User's who go ahead and buy a computer during this time and can't get Office as an OEM add-on (at OEM pricing) will either pirate it (causing MS "irreparable harm"), or will have to pay full price later (causing the consumer "irreparable harm"). You could mitigate the damage to users and MS with some type of voucher allowing a later purchase at near OEM pricing, but the OEMs may still suffer.

MS has no intention of stopping sales of Word or Office, but it's not the court they're trying to bluff. MS is trying to get the OEMs and retailers to join them in showing that the injunction will cause "irreparable harm" to them, and thus have the injunction lifted. Then they can drag it out as long as practical and make i4i wait for their money (see option 3) until MS gets around to releasing a version of Word that doesn't infringe on the patent.

P.S. None of the above implies that I think the patent is valid.

RE: Interesting...
By Smilin on 8/25/2009 6:13:15 PM , Rating: 2
Option 1: They can't or are unwilling to pay the $290M? Absurd, it's practically pocket change to MS. They've got billions in cash and liquid assets, they could pay it in 24 hours if they had to.

This would be the end of the case though. They will have basically validated a bogus patent and guaranteed anyone trying to use their open format now has to pay licensing instead. Unless i4i is willing to accept a settlement (large one even) that does not admit guilt then there is no way MS should go for this.

The judge needs to get rid of the injuction while appeals are still ongoing. This injuction will result in such harsh punishment for the defendant that they will consider giving up their appeal just to avoid it. That is not justice.

No, the judge needs to drop this thing. I'm sure MS would love to drag this case out, stall and all that. If i4i was having lost revenue that was going to bankrupt them I would understand. This isn't the case though. i4i is alive and well and doing just fine without this money. They can wait patiently for the whole case to be concluded.

RE: Interesting...
By gstrickler on 8/29/2009 2:17:24 AM , Rating: 2
“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls

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