Microsoft loses second Word patent appeal, on the hook for $240 million in damages
By Vlad Savov 
posted March 12th 2010 8:54AM
posted March 12th 2010 8:54AM
And the intellectual property rollercoaster continues. Microsoft's second appeal of that $240m judgment banning sales of Word with features infringing on i4i's XML-related patents has been rejected, leaving the Redmond giant with a huge fine to pay atop its undoubtedly sky-high lawyer bills. The appeals court held that Microsoft was explicitly aware of i4i's patents before implementing the relevant XML code into Word -- undoubtedly because i4i had been selling an extremely popular XML plugin for years and had approached Microsoft about licensing it. Yeah, oops. Don't worry, though, there shouldn't be any consumer impact here: old versions of Word aren't affected, and current versions of Word 2007 and Office 2010 don't have the offending features. Still, Microsoft might be able to appeal yet again, depending on a panel ruling on the matter -- at this rate, we'd expect it.
Is SO 2009
@RincewindWiz That comment was supposed by be surrounded by XML tags, but they were stripped. Oh well :-(
@RincewindWiz (sorry to highjack ya post)
The only thing I find silly about this is that if MSFT did not use i4i what would have happened. I mean know it was their code and they "apparently" used it purposely.If they didn't use i4i wouldn't they have just made their own?
I mean "IF" MSFT did 'steal' this code then pay some royalties and I hope they got another code they can use and release and update so i4i's code becomes useless and irrelevant? From the little buts I've read I don't think i4i tried mediation to get royalties they just sued didn't they?
@Federaly I wonder how wide i4i's patent is. I too fail to see why Microsoft couldn't have written their own XML format mapping their older binary data structures.
@Federaly
Microsoft has already patched all of their current Office software to the updated version they are using for all future products that doesn't include the i4i method of XML encoding.
@Federaly
It's not an issue of code theft (as far as I'm aware); that would be a copyright infringement. This is a patent infringement i.e. Microsoft wrote code which uses an algorithm or method patented by someone else. Once discovered they had two options: license the patent or use a different algorithm/method. As Delta says, they chose to do the latter.
@RincewindWiz Imagine, if MS had just moved to the Open Document Standard, they could have saved themselves a quarter of a billion dollars.
@Federaly It doesn't matter who's actual code Microsoft used. That's not the issue. The issue is that Microsoft deliberately infringed on an i4i patent.
Patents don't cover the actual code. That's what copyright is for. Patents protect the concept or idea. The design behind the code implementation. Microsofts' code might look very different from i4is' code. But the objective end result are the same. Microsofts' custom XML feature is designed to do essentially "exactly" the same thing as the i4i plug-in.
This strikes at the heart of the controversy surrounding software patents. A patent isn't supposed to be issued for something that's as intangible as an idea. Patents are supposed to be used to protect actual inventions. Software by it's very nature is intangible. It's an idea which finds form in the expression of an algorithm being processed in a computer. Algorithms are also generally not patentable.
Simple common sense would then lead us to believe all software patents were invalid. However courts the world over keep honouring them and patent offices keep issuing them. The USPTO is simply the most infamous.
Microsoft, who is incidentally no stranger to patent law disputes, should have known better than to steal something from a company they did not yet own. Especially as it was such a clear cut case. At this point Microsoft should bow out as gracefully as it can. It should pay the fine and licence the technology if it still wants to use it.
I no longer take any pleasure in seeing Microsoft beat up.
@CRA1G I do. To each his own?
@CRA1G
I second that, the dog-pile on microsoft is getting a little ridiculous...
@CRA1G
Sounds like they beat themselves up on this one.
@CRA1G
Beat up? They broke the law and screwed over another company and got caught. This is justice.
@msgyrd Software patents != Justice
@msgyrd I realize that. Was just saying that, in years past, I would've been giggling giddily at the thought of Microsoft having to pay some bucks. Now, it's just another company...sometimes it does OK, sometimes not so much.
I guess all that anti-trust action worked, eh?
@CRA1G I do. but only to a point. And that point is when the Apple Haters (especially the ProWindows ones) scream about big bad Apple doing something and I can point to Microsoft being in trouble also.
Cause the 'holier than thou' from either side really irks me
@Charlik
This is TWO cases against Microsoft who are two orders of magnitude biger that CrApple.
Apple ripped off their name from The Beatles Apple Corp. in the 1960s. Then they ripped off Xerox's OS/UI and ladded it the Lisa. Then they broke the terms of their agreement with the Beatles and willfully used the Apple name in the music business because they were not selling any of their crapo computers.
Now they are stealing other patents and then claiming them as their own.
No, no, no Apple IS the darkside.
@rederikus Well, we know who doesn't use a Mac now.
@rederikus For the record, Apple didn't "rip off" PARC's windowing system. They licensed it fair and square.
The Apple Corp. complaint is, IMHO, valid. Though to say that Apple (the computer company) got into online music "because they were not selling any of their crapo computers" shows your obvious bias.
Remember, the first iPods weren't even PC compatible, so if nobody was buying their computers then they wouldn't have had a market. Diversifying into portable music players was simply a good idea, and one which they implemented beautifully. The iTunes Music Store was a logical extension of the success of the iPod.
@CRA1G
I've never taken pleasure when it's some shit patent troll.
@Standingfast Not when Microsoft continually beat up on everyone else. They remain the biggest hypocrites in business only after MAC. They create patents based on stuff they've only thought of & not developed so they can pursue anyone who does develop something better than they can themselves. I hope Microsoft die a slow death. Oh & MAC too but M$ has continually slowed development using their patents. At least IBM only use them to protect themselves.
If the patent system was overhauled properly I believe the patent office wouldn't have enough cash to pay back the owners of dumb patents & perhaps that's their problem & not the patent office but the patent office shouldn't have granted 90% of them in the first place. Perhaps they should be the litigious victim for a change & that may make them be a little more careful.
WOW...really. This sucks for MS.
What does this mean for Office owners like myself?
@TheLionOfAzzalle
I think Engadget reported that if need be MSFT have already made a work around but not sure :s
@TheLionOfAzzalle You have to pay 240 millions.
@TheLionOfAzzalle
Nothing, they can no longer sell Word 07, but Office '10 does not use any of the technologies noted in the lawsuit. Office 10 is on its way.
@NaJaKwa That's interesting since the place I work is still "standardized" on Office 2003.
@NaJaKwa
They've already patched Office 2007 to avoid the infringing XML encoding. The date to remove the software from their store was back in January and Microsoft has since re-instated Office on their online store after the work-around was added. All at means at this point is the damages that they need to pay.
@TheLionOfAzzalle
Open Office FTW
@TheLionOfAzzalle.....It means nothing for Office users. It only means something ($$$) for the lawyers on both sides of this case. It would have been cheaper and a lot less dramatic for MS to buy i4i outright.
@jaradFromSubway You can't do that when i4i wants money and their "CEO" brother is the head firm of the lawsuit.
Win win for both brothers.
This is really messed up.
i hope they bring this up to the highest court they can, and show up there to prove how stupid that system is (i know.. they won't care, those lawyers)
If the lawers are already on staff or retainer i doubt this costs anything more than overtime for the underlings.
@timmy2000
Willful patent infringement means they pay triple damages plus the other guy's legal fees. Not chump change - even for Mr. Softy.
Please.. just... stop the madness.
Its a implementation of a way to read a file. While I don't like Microsoft, this is just.. stupid.
Why is everyone so Microsoft biased in here? They used someone else intellectual property and got caught. Now they have to pay up.
What's so wrong about it? All you M$ fanbois are sickening. ;-)
@macmann
It really is crazy! The level of M$ fanboism is outrageous. Since when did M$ become the underdog that everyone wants to cheer for?
Stealing intellectual property?? M$?? No way!! They're too good for that!! They make the xbox 360... I mean come on!!
@think before you react
I agree. Im a MS fan, I Love their products. But if they stole code, they should justly pay the piper.
@think before you react
I agree if the code was stolen it needs to be paid for, HOWEVER, it had better be true. Msft does "seem" to get sued a lot more than they go after people.
@Standingfast
That's just the nature of operating as big as MS does.
When you're a direct competitor with literally every company that produces anything technology related, and you're a known criminal organization that's made no efforts towards self-restraint, you're going to be a big target.
@Standingfast Thats because MS has nothing to go after. You have to actually create your own IP worth stealing, to be stolen.
@macmann
240 million?!? For XML manipulation tools? Really? I understand that Word is a huge seller for MS, but how many people bought it solely for these XML features?
Even worse....i4i is a Northern USA company!
@jaradFromSubway
I thought i4i was a Canadian company based in Toronto.
I still use Office 2003 because I hate the Ribbon interface.
Looks like I'm safe.
@Prevacator
Try Open Office. The latest version is pretty slick and for 95% of people it's all they will ever need. So far it has worked with every Word, Excel, and PPT file I've thrown at it. I still have Office on my machine, but it looks like MSFT has seen the last upgrade payment from me. (Yes, I did pay a donation to openoffice.org, so don't claim I'm trying to get something for nothing)
LMFAO
LOL, wow. I really don't know why MS is fighting this, they are apparently able to make a work around that doesn't use this XML code, they already have it out, why string this along? Just pay the relevant people off, put out the non infringing Office versions, and move on.
They're Microsoft, they can afford it.
@DJ
I agree. It seems like the fault is pretty clear in this case and I'm not quite sure why MS's legal team would waste the money to continue fighting this.
@Delta
To bankrupt i4i with legal fees? Or since i4i is a small company, sink the company by requiring all their attention and funds be poured into a court case instead of their customer base.
And MS probably did the math and risk assessment and found that it's worth whatever % chance of winning and not paying the damages vs. losing and paying the 250mil.
@msgyrd
Fair enough. I would make a terrible businessman.