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Currently Microsoft owes i4i $300M USD in damages for infringement of its Custom XML patented technology. Microsoft used Custom XML in the best-selling Office 2003 Suite. Microsoft may appeal to the Supreme Court.  (Source: Photobucket)
Microsoft is unwilling to pay its big infringement fine

Microsoft has tried and tried to beat Toronto, Canada-based software company i4i in U.S. Federal Court, but has been handed a long string of defeats.  In May 2009 it lost a patent infringement case to i4i and was ordered to pay $200M USD in damages.  Then in December 2009 it lost its appeal to the U.S. Federal Circuit Court of Appeals, resulting in an increased judgment of $300M USD in damages, including $40M USD tacked on for "willful" infringement.

Now it's lost yet again, as the U.S. Patent and Trademark Office rejected Microsoft plea that the patent used in the case be reexamined.  Microsoft is left with two options -- pay the big fine or try to continue its climb up the legal ladder to the only remaining rung -- the U.S. Supreme Court.  That may be what it decides to do, its lawyers indicate.

Microsoft's Director of Public Affairs Kevin Kutz responded to the defeat of the USPTO request for reexamination, writing, "We are disappointed, but there still remain important matters of patent law at stake, and we are considering our options to get them addressed, including a petition to the Supreme Court."

I4i has made it clear that it claims no ill intentions towards Microsoft.  It claims it merely wants to be rewarded for the Custom XML scheme that cost it millions to develop, which Microsoft liberally borrowed from and used in its best-selling Office 2003 Suite.  For the small company a reward would mean it could continue its format development work, while a defeat could spell financial ruin for the business who took a gamble on the massive legal fees required to carry out a litigation campaign against Microsoft.

The company writes in a statement, "i4i’s ‘449 patented invention infuses life into the use of Extensible Mark Up Language (XML) and dramatically enhances the ability to structure what was previously unstructured data. As the magnitude of data grows exponentially, this is a critical technological bridge to controlling and managing this sprawling octopus of data and converting it into useful information."

This core element of the case -- Custom XML -- is a scheme for storing and displaying rich information.  Microsoft used Custom XML in Office 2003, but did not pay i4i licensing fees, according to the plaintiff's claims.  Microsoft disputes this, but has since removed Custom XML from its Office products via a patch to escape a court order forcing it to cease sales.  The Office 2010 beta/RTM builds notably do not use Custom XML, as well.  Custom XML should not be confused with the similarly named Open XML, which is unrelated to the case.


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RE: software patent = fail
By drycrust3 on 5/12/2010 1:19:45 PM , Rating: 1
Wrong! If you go to the trouble of researching and developing a line of software for a niche that no one else thought of, and that line of software is profitable, then obviously you would be annoyed if you saw another company was giving away software that was not only similar, but pretty well identical, especially if they had used only your software as the basis for their research and development. This is what has happened here: Microsoft, who is also the dominant player in the PC operating system market and the supplier of the Microsoft Office Suite, set out to put i4i out of business by giving away software that not only did almost exactly what i4i's did, but little else besides.
The fact it did little else besides indicates they just used i4i's software as the basis for their research, and not that their (Microsoft) range of products that matched i4i's was coincidentally developed while developing a broad range of marketable software packages that were intended to sell Microsoft Office.
If Microsoft had given away a broad range of free packages which included some that could have been easily modified to do what i4i's did, they would have got away with this; if they had given away a broad range of packages that included some similar to what i4i's did, but not their whole product range, they probably would have got away with it; but no, they decided to give away almost exclusively only packages that were pretty well identical to what i4i did and little else. If Microsoft charged higher prices from i4i, they probably would have got away with it too. But no, they gave it away, and as the dominant player in the market, that can easily be seen as using their marketing position to put another business out of business by "unfair tactics".
Whether that is illegal or not in America I don't know (I'm not American), what I do know is that the American courts decided that Microsoft must stop selling or giving away that software while they appeal their huge fine.


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