BUYING GUIDE.
A court is forcing Microsoft to make changes to its word-processing software or stop selling it altogether. The Tuesday ruling against Microsoft's appeal of a patent-infringement verdict gives Microsoft just weeks to remedy the situation.The U.S. Court of Appeals for the Federal Circuit in Washington upheld Texas U.S. District Court Judge Leonard Davis' decision for Canadian company i4i. The company claimed Microsoft violated its patents for custom XML in Word 2003 and Word 2007.
Davis ordered Microsoft to pay in excess of $290 million and issued a permanent injunction against the software giant for what is known as the "449 patent." The judge ruled that Microsoft willfully infringed on the patent and permanently enjoined Microsoft from selling Word 2003 and Word 2007 in the United States and using any infringing future Word products to open an XML file containing custom XML.
Microsoft Feels Judge's Wrath
Microsoft appealed the ruling, but the three-judge appellate panel ruled against the software giant. The injunction applies only to copies of Microsoft Word 2007 and Microsoft Office 2007 sold in the U.S. on or after the injunction date of Jan. 11, 2010. Products sold before this date are not affected.
"A small company was practicing its patent, only to suffer a loss of market share, brand recognition, and customer goodwill as the result of the defendant's infringing acts," the judges' panel said in upholding the court's order. "The district court found that Microsoft captured 80 percent of the custom XML market with its infringing Word products, forcing i4i to change its business strategy."
The court ruled that Microsoft can continue to offer technical support to current users of Word, but is not allowed to instruct new users on using the custom XML editor or to sell copies of Word with the disputed feature.
Microsoft May Fight Back
Kevin Kutz, director of public affairs for Microsoft, said the company is moving quickly to comply with the injunction. For Microsoft Word 2007 and Microsoft Office 2007, he said, the company has been preparing for this possibility since the District Court issued its injunction in August and has put the wheels in motion to remove the little-used disputed feature.
"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," Kutz said. "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."
While Microsoft is moving quickly to address the injunction issue, Kutz said, the company is also considering its legal options, which could include a request for a rehearing by the Federal Circuit Court of Appeals en banc or a request for a writ of certiorari from the U.S. Supreme Court.
What About Office 2010?
"Microsoft will undoubtedly pay the judgment. But they are going down the path of removing the technology and they expect to have it out of the product by the first part of next year," said Rob Enderle, principal analyst at the Enderle Group. "I believe that gives them about a week when they won't be able to sell the offering, or else they will buy a variance for i4i."
Enderle said most Microsoft Word users won't experience any ill effects from the suit. And by the time Office 2010 hits the market, the infringement suit will be a distant memory for Microsoft. Microsoft already removed the offending technology from Office 2010, which is expected to be released toward the end of 2010.Jennifer LeClaire, newsfactor.
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