Microsoft loses i4i appeal; must pay $290M and alter Word

Microsoft Loses Patent Appeal: Word To Be Barred From Sale Starting January 2010

Updated 2 p.m.: Turns out, Microsoft in October quietly released a patch to strip custom-XML support from Word 2007.

Updated 1:35 p.m.: Added additional comment from i4i Chairman Loudon Owen, and spoke to an analyst about the likelihood that Microsoft would now license i4i's technology.

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Microsoft must pay more than $290 million, and either stop selling Word or strip its custom-XML editor, after a three-judge panel on Tuesday upheld patent-infringement charges alleged by a small Canadian company.

Microsoft lost its appeal of an August district court decision that awarded i4i Inc. $200 million and slapped Microsoft with an injunction on selling Word in its current form. Toronto-based i4i sells custom-XML add-ons to the ubiquitous word-processing software.

It's unlikely – to say the least – that Microsoft will stop selling Word, so it must alter the software to comply with an injunction that takes effect Jan. 11. It must also pay i4i more than $290 million after additional fees and interest jacked up the jury-awarded legal penalty.

“In this case, 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,” a three-judge panel of the U.S. Court of Appeals for the Federal Circuit said in court documents published Tuesday (PDF). “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.”

Full Story Microsoft loses i4i appeal; must pay $290M and alter Word.