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Microsoft Patents The Courts

Microsoft Ordered To Pay $290M, Stop Selling Word 272

Posted by kdawson
from the not-a-troll dept.
Cytalk and other readers tipped us to Microsoft's loss in a US appeals court, in a patent case brought by Canadian company i4i. Microsoft must now pay $290M and either stop selling Word (and probably Office) by January 11, or somehow work around the patent by that date. A Seattle PI blog reports that Redmond has a few options left: "In a statement, Microsoft said it was working hard to comply with the injunction. The company also said it is considering further legal options, including possible requests for a new hearing or a writ of certiorari from the US Supreme Court." Update: 12/22 20:47 GMT by KD : Tim Bray has up a blog post explaining why it would be no great loss if Microsoft dropped the "custom XML" feature in dispute.
Update: 12/22 23:04 GMT by KD : Reader adeelarshad82 pointed out a statement released by Microsoft earlier today, which says in part: "We expect to have copies of Microsoft Word 2007 and Office 2007, with this feature removed, available for U.S. sale and distribution by the injunction date. In addition, the beta versions of Microsoft Word 2010 and Microsoft Office 2010, which are available now for downloading, do not contain the technology covered by the injunction."
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Microsoft Ordered To Pay $290M, Stop Selling Word

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  • by Fallen Kell (165468) on Tuesday December 22, 2009 @03:02PM (#30528016)
    Now that MS is at the receiving end of the stick on one of their BIGGEST money making products, I wonder if we might see their tune change on support for software patents...
    • by sopssa (1498795) *

      What is their tune? There haven't really been cases where MS is patent trolling other companies. Actually they've even given some patents to neutral third party, as open patents. But they have to go by the system and patent their things to protect themself from patent trolls. Just like Google, Apple and everyone else.

      Blame the (broken) system, not those who have to go by it.

      • by sconeu (64226)

        Besides the FAT patent, how about "Linux infringes $SOME_NUMBER of our patents, but we won't tell you which ones.'

    • Re: (Score:3, Insightful)

      by wizardforce (1005805)

      NOt likely. Microsoft has been stockpiling a massive arsenal of patents (as has IBM) in order to use patents as weapons. I really doubt that they would push for change in the right direction because it would likely mean that they'd lose a lot of their weaponry in doing so.

  • by Greg Hullender (621024) on Tuesday December 22, 2009 @03:07PM (#30528084) Homepage Journal
    I thought it odd that they calculated the damages on the assumption that, had Microsoft paid royalties on the patent, they'd have pushed the price of MS Word from $90 to $500 with no loss of sales. It seems to me that if the traffic would support that price, Microsoft would already have been charging it!

    --Greg

    • Actually, I think what they are saying is that the company lost 410 dollars per license on about 610000 licenses because of Microsoft so that is how much they are entitled to.

      I do not know the whole situation, so I cannot comment in whether these charges are appropriate, I am only explaining how I think the number was calculated.

      • by danlip (737336)

        Where did the figure of 610000 licenses come from? Because I am sure MS has sold far more than that, which would bring the price per license way down. Even if they only sold copies to 1 out of every 10 US citizens it would be 30M copies.

        • The licenses i4i might be claiming they did not sell because Microsoft infringed on their patent.

        • by Mr. DOS (1276020)

          I believe the ruling only affects Word 2007, not previous versions. Even for Word 2007, though, 610,000 is an awfully small number.

                --- Mr. DOS

    • by gbjbaanb (229885)

      I guess that they think the price difference would be for those companies who would otherwise have bought the customXML addon instead of having it bundled. Most consumers would not use the feature anway, let alone buy it. So the extra price is entirely down to those corporate customers who would have shelled out for the extra feature.

      Personally, I think that's a very small number. If the addon was bundled with Office Premium Plus Extra Ultimate edition, then a lot of corporates buy it regardless. I know we

  • Missing option. . . (Score:3, Interesting)

    by JSBiff (87824) on Tuesday December 22, 2009 @03:09PM (#30528144) Journal

    "Microsoft must now pay $290M and either stop selling Word (and probably Office) by January 11, or somehow work around the patent by that date."

    They could, you know, settle with i4i and license the patent from them?

    Don't get me wrong, I'm not saying I think i4i's patent is legitimate (I'm not really very familiar with this case - somehow missed it before this, will need to study up on it more later). I'm just saying, the list of options seems to leave out one pretty big possibility.

  • Love it (Score:5, Insightful)

    by microbox (704317) on Tuesday December 22, 2009 @03:11PM (#30528178)
    Power structures serve the powerful first. Microsoft wants the patent regime, but it doesn't want situations like this. When the powerful get shafted, then we can expect patent reform.
    • I think it's more likely we'll see tort reform, which will probably make it so that only the most wealthy individuals and corporations can risk a lawsuit. Small companies like i4i will then no longer have options. If we're lucky, the tort reform will also affect patent and copyright trolls, but I'm pretty sure whatever they do to fix it will probably increase the durability of IP overall and generally punish everyone else.

  • by Anonymous Coward on Tuesday December 22, 2009 @03:11PM (#30528180)

    that i4i's stock price grew THREE sizes that day.

  • Something doesn't add up here. Why is i4i not simply willing to license the rights to use the patent to MS (for an exorbitant fee). Why ask for it to be removed? Seems like a license to print money.

    • Re:Obvious solution (Score:5, Interesting)

      by reebmmm (939463) on Tuesday December 22, 2009 @03:23PM (#30528350)

      Well, on the one hand, the patent gives i4i the right to exclude others from practicing the claimed invention. The court has already told MS that Word is infringing, therefore selling Word would violate the patent rights. MS could simply removing the infringing feature and it could continue selling Word. MS is in control of this aspect.

      On the other hand, at the moment, i4i has very little incentive to offer MS any sort of license. i4i won at the lower court and on appeal. Plus, I believe the story goes that they approached MS and MS sent them away and then went ahead and implemented it anyway. They will be able to demand infringement-sized royalties the closer it gets to January 11.

    • Re:Obvious solution (Score:5, Informative)

      by PeterBrett (780946) on Tuesday December 22, 2009 @03:25PM (#30528366) Homepage

      Something doesn't add up here. Why is i4i not simply willing to license the rights to use the patent to MS (for an exorbitant fee). Why ask for it to be removed? Seems like a license to print money.

      If you read about the issue in more detail, you'll discover that i4i tried for several years to get MS to pay for a patent license, and MS stalled and delayed and equivocated about it. The lawsuit was a last resort, and AFAICT the damages are so high as a punitive measure. In theory, MS shouldn't be able to get away with ripping people off just because they're the big kid in town.

      But yes, I'm sure i4i could have done things in a better way -- they're not completely free from blame for this mess.

  • Hear that sound? (Score:5, Interesting)

    by MosesJones (55544) on Tuesday December 22, 2009 @03:18PM (#30528278) Homepage

    Its the sound of the patent system beginning to crash down. RIght now there are two choices

    1) Take the fundamentally broken US system and roll it out across the world
    2) Take the rest of the worlds approach that software can't be patented and roll it out to the UK

    The scary thing is that even with judgements like this and the patent trolls out there we are actually seeing the likes of Microsoft push for option 1.

    Patents will be the death of innovation if the system continues in this way, particularly if the US judgements are assessed at insane levels of cost. If Microsoft had known about this patent when starting the development they'd have bought the company for less than this judgement.

    • by reebmmm (939463)

      Patents will be the death of innovation if the system continues in this way, particularly if the US judgements are assessed at insane levels of cost. If Microsoft had known about this patent when starting the development they'd have bought the company for less than this judgement.

      Uh, they did know: http://blog.seattlepi.com/microsoft/archives/178682.asp [seattlepi.com]

      Back in 2001, two companies now locked in a nasty legal battle were working together to develop software for the U.S. government. Microsoft Corp. needed a t

  • If it is a canadian company doing business in the US then I guess that's ok.

    • by gstoddart (321705)

      If it is a canadian company doing business in the US then I guess that's ok.

      TFA clearly states that this was a US appeals court which upheld the judgement. Sadly, this company is playing within the US court rules -- don't blame the rest of us up here in Canada.

      I can't for the life of me figure out how someone seems to have gotten a patent on XML that they've not been slamming the rest of the industry with.

      Cheers

      • I can't for the life of me figure out how someone seems to have gotten a patent on XML that they've not been slamming the rest of the industry with.

        They didn't. It's not a patent on XML -- it's a patent on a specific way of manipulating and processing structured data like XML. Most people don't use it (i4i have stated that they do not believe OpenOffice.org or KOffice are infringing, when they were asked). Microsoft do, and refused to pay for a patent license.

        Microsoft are lieing in a bed they made for themselves, and no-one else need worry.

  • i4i ... (Score:5, Funny)

    by Anonymous Coward on Tuesday December 22, 2009 @03:22PM (#30528332)

    ... and Microsoft goes blind

  • by Greg Hullender (621024) on Tuesday December 22, 2009 @03:38PM (#30528570) Homepage Journal
    The Microsoft suit with 2th-4-2th seems to be going about the same way.

    --Greg :-)

  • RTFP (Score:5, Informative)

    by Ukab the Great (87152) on Tuesday December 22, 2009 @03:39PM (#30528586)

    The patent in question. [zdnet.com]. Decide for yourselves.

  • I'm not a lawyer so I don't know what a "writ of certiorari" is - is that a "we're too special to follow the law so please allow us to break it"?

    (Yes, yes, I'm going to google it (not Bing! it...) to find out what it really is but I want to make a point before I go...)
    • Re: (Score:3, Informative)

      by GTarrant (726871)
      A writ of certiorari is a request from a higher court to a lower one informing it that it wants to review the case at hand, and that all records and transcripts from the trial should be sent from the lower court to the higher one.

      Filing a request for writ of certiorari with the US Supreme Court is in essence a fancy way of saying "We're attempting to appeal to the US Supreme Court". There is, of course, no guarantee that the Court would take the case, the success on petitions for certiorari is something on
  • by PPH (736903)
    Thank goodness that all of the apps I've ever been involved with date back from the old days when this was all done with SGML. That stuff is probably all out of patent (if it ever was patented) and into the public domain by now.
  • Too late... (Score:2, Informative)

    by Anonymous Coward

    Microsoft already has a work-around. They've been pushing it to their partners since this morning at least:

    http://oem.microsoft.com/script/contentpage.aspx?pageid=563214

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