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May 20, 2009 1:32 PM PDT

Microsoft hit with $200 million patent verdict

by Ina Fried
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A federal jury in Tyler, Texas, on Wednesday ordered Microsoft to pay $200 million in a patent infringement case.

The jury ruled that the custom XML tagging features of Word 2003 and Word 2007 infringed on a patent from Toronto-based I4i.

A Microsoft representative said the company was "disappointed" by the verdict and would seek to have it reversed.

"We believe the evidence clearly demonstrated that we do not infringe and that the I4i patent is invalid," Microsoft spokesman David Bowermaster said in a statement. "We believe this award of damages is legally and factually unsupported, so we will ask the court to overturn the verdict."

Last month, in a separate infringement case brought by Uniloc, Microsoft was hit with a $388 million verdict. The company said it would appeal that order.

During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina.
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by NotForNuthin May 20, 2009 1:51 PM PDT
No big deal... they can just add a few extra bucks on to the price of Windows 7 to pay for this.
Reply to this comment
by TravisOwens May 21, 2009 12:14 PM PDT
I'll keep this in mind when you complain that Win7 costs like $200+ but "back in the day Windows95 was $99" which you'll be posting in about a couple months.

Remember, the only people who pay for these absurd lawsuits are the customers of the product, and that's you.
by danxy May 20, 2009 1:55 PM PDT
While I'm no Microsoft fan, this is another demonstration of the broken patent system. Patents for software should be disallowed or at least not issued so easily. Lawyers form shell corporations to buy patents and go off and sue corporations that have money. They don't sue in their home district or in a high-tech area, but in someplace like rural Texas where jurors are more-easily conned.

On the other hand, Microsoft abuses the system also. They recently patented crippling of their MS Windows operating system, something that has been done for a long time.
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by monkeyfun14 May 20, 2009 1:58 PM PDT
Isn't it a bit odd that office has had this feature for years but as soon as a recession rolls around they are suing for it?

I guess lack of money drives us to do petty things.
Reply to this comment
by Get_a_life_Leo May 20, 2009 2:04 PM PDT
@monkeyfun18 This case was winding through the courts for several years. The recession hit 6 months ago. Do the math.

Microsoft will fight it and so it'll take another 5+ years to sort out. Only the lawyers are happy.
by odubtaig May 21, 2009 10:24 AM PDT
Well, it's Monkeyfun's world where all Microsoft's patents are iron-cast but if MS says a patent is invalid it automatically is.

For the record: a patent on XML tagging? Are you yanking my chain?
by gerrrg May 20, 2009 2:00 PM PDT
Patent trolls!

Just when you thought that XML was an open language, someone gets a patent on a process for using XML.

Hmmm...maybe I should patent the printing of XML schema on t-shirts?
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by Vegaman_Dan May 20, 2009 2:03 PM PDT
Patent trolling is the new IT industry these days. You can see Microsoft, Apple, Google- all of them scrambling to patent pretty much anything before one of these court cases comes up from out of nowhere and bites them. Companies are forced to patent things that they know will never be used just in the odd chance that one of their competitors *might* use it.
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by Pete Bardo May 20, 2009 2:08 PM PDT
Sure, the patent system is broken, but Microsoft is one of the parties that broke it! Their philosophy on third party software is emulate, integrate, or buy it. If that doesn't work, just steal it.

But this article gives no insight as to what the patent covers or what MS did to violate it. It seems, on the surface, that use of this open source standard, no matter how you twist it, should not be subject to patents or claims.
Reply to this comment
by eadeguzman May 20, 2009 2:41 PM PDT
So Microsoft broke the patent system because of their philosophy?

Can you demonstrate a case where Microsoft influenced in a major way how the patent system and process came about?

I believe that the patent system is outdated and should not apply to software/code until it's updated.
by MadLyb May 20, 2009 3:07 PM PDT
I agree with eadeguzman.

If you are a large technology company, you *have* to build a large patent library to use against other companies with large patent libraries and that has resulted (for the most part) in a patent detente for companies that actually make something, but these IP Companies fall out of the loop and do nothing but drag down innovation and introduce cost to the system.

Let's make it a lot harder to patent something and create a vetting process that actually involves people who know something about technology and then maybe the madness will abate.
by monkeyfun14 May 20, 2009 2:10 PM PDT
We need a new method for protecting intellectual property before no one will be able to invent anything. If every product has to have licenses from other companies I can see a hike in prices for consumers...
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by The_happy_switcher May 20, 2009 2:49 PM PDT
""We believe the evidence clearly demonstrated that we do not infringe and that the i4i patent is invalid," I guess their lawyers weren't good enough to convey that point were they? Couldn't have happened to a better company. Hopefully more negative patent verdicts are in Mafiasoft's future.
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by MMC Racing May 20, 2009 3:29 PM PDT
Jury sticks it to big company - news at 10... Appeals court throws it out or reduces it, news at 11.
by eadeguzman May 20, 2009 3:54 PM PDT
Maybe their lawyers aren't tech patent savvy enough... But I think it's both ways, no matter how smart you are if the jury aren't either smart enough or don't care enough to understand the technicalities of the case, then the case will be left to their own personal bias.
by dargon19888 May 20, 2009 8:53 PM PDT
This is just lawyer talk saying that they think they have enough for an appeal and to drag this case on hoping for a settlement that is lower than the 200 million that they are on the hook for. Their goal is to drag this out so that the legal costs mount forcing the other side to settle. When you have a couple of billion in your pocket, 200 million is chump change. ;-)

As to Microsoft, Karma can be a *****!
by t8 May 20, 2009 7:24 PM PDT
Microsft beleives that they don't infringe on anyone's patents and that it is always others that infringe on theirs. Please someone get rid of this company.
Hurry up and quash them Google or Apple or someone.
Reply to this comment
by Bob Kakis May 20, 2009 7:52 PM PDT
Well said, T8! I agree 100%.
by monkeyfun14 May 20, 2009 8:06 PM PDT
Hmm

Either choose between Linux or Apple?

So I would have to choose between a company who will only let me use what they want me to use and a company who can't get a truly user friendly product out the door wow lovely.
by odubtaig May 21, 2009 10:27 AM PDT
Whereas now you have the best of both worlds. Why give that up?
by X-C3PO May 20, 2009 8:47 PM PDT
The only winner in the world is the lawyers,
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by digitalshaman May 21, 2009 4:52 AM PDT
So it is the patent-holder's fault. & the lawyers & the judge & the jury & the patent law. What a bunch of nonsense! MSFT is a serial infringer of other people's property. Patent lawsuits are $4-5 mil & only 50% of the time does the plaintiff prevail - sounds like an expensive coin flip.

Now the real question - how many of you are using unauthorized MSFT software? Odds are all of you!

Copyright infringement gets you a hefty fine & you can go to jail: patent infringement is simply an annoyance? Puh-leeze! Can't wait to see how more anti-trust enforcement further curbs abuse by these serial patent pirates.
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by biffhenerson May 21, 2009 7:16 AM PDT
Lawyers make money because entities break the law. Stop breaking the law and the lawyers will go away.
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by rfgcnet May 22, 2009 10:42 AM PDT
The technology industry is no different than any other industry--it must abide by the laws that are on the books. If the citizens do not like the laws change them. The patent office has been around for a long time and intellectual property, in order to have validity, must comply with the patent codes.

It is unfortunate that Microsoft does not feel obligated to comply with the law. I am sure they have attorneys and patent counsel that advise them on an ongoing basis that they are in violation of many, many patents that are of record. Why should they get a pass when everyone else must comply?

Rather than fight these lawsuits in court (spending millions of dollars of their shareholders' assets) why don't they try and negotiate the inevitable? There are a variety of remedies that might apply that might be less costly. Why not mediation or third party arbitration? I don't think many of these lawsuits would go all the way through the court system, pass the Markman verdict stage and go to trial if they did not have merit. In this instance, Microsoft is the company that is throwing its weight around trying to intimidate and bully its smaller plaintiffs. If this continues to be their modus operandi it is only logical that they will continue to lose.
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by moelar May 24, 2009 9:12 AM PDT
sounds like MS is in major denial.
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by Josh_K_2222 May 31, 2009 10:50 PM PDT
Large companies like Microsoft often stifle innovation by seeking to weaken patents owned by smaller entities. Although I am confident microsoft will simply appeal the decision, I'm glad to see the smaller company prevail here.

GeneralPatent.com
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About Beyond Binary

During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft.


Beyond Binary is a look at how technology is changing our lives and the people behind all that life-changing stuff, with an extra emphasis on that which emanates from Redmond, Wash.

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