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August 18, 2009 2:04 PM PDT

Microsoft asks for stay of Word injunction

by Ina Fried
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This story was updated with comment from I4i Chairman Loudon Owen and Microsoft spokesman Kevin Kutz.

Microsoft on Tuesday asked an appeals court to halt an injunction that would force the company to stop selling Microsoft Word in its current form.

A judge last week issued an injunction that would force Microsoft to stop selling versions of Word with a custom XML function that a jury found infringes on a patent held by Canadian software maker I4i. The judge had ordered the injunction to go into effect 60 days after the ruling.

(Credit: Microsoft)

In its "emergency motion," made Tuesday, Microsoft asked an appeals court to halt that injunction and also to speedily hear the company's appeal, once it is filed.

Microsoft said that it is trying to remove the functionality found to infringe on I4i's patents, but unless it can do so, it would be forced to stop distributing Word in the U.S. market. "Already, Microsoft is expending enormous human and financial capital to make its best effort to comply with the district court's 60-day deadline," Microsoft said in the appeals court motion.

The software maker said the injunction could potentially keep Word and even Office off the shelves for months. "Unless Microsoft is able to redesign Word and push that redesigned version through its entire distribution network by October 10th...Microsoft and its distributors (which include retailers such as Best Buy and OEMs such as HP and Dell) face the imminent possibility of a massive disruption in their sales," Microsoft argues in the court papers.

Microsoft's motion is expected to be assigned to a three-judge panel that would consider the request. The software maker is also expected to file its full appeal shortly. On Friday, Microsoft made a motion to the trial judge in the case to allow the company to appeal the verdict without having to post a bond.

As noted in our earlier coverage, Microsoft has several options, including seeking remedy from the courts, creating a technical workaround that ensures Word is not infringing on I4i's patent, and settling with I4i.

In Tuesday's filing, Microsoft noted that, in the period since the jury's verdict, the U.S. Patent and Trademark office has provisionally rejected the patent in question upon a reexamination and said that the company meets the standard for staying the injunction because it is likely to win its appeal, will be irreparably harmed by the injunction, that i4i won't be harmed by the stay and that the public will "face hardship" if Word or Office is absent from the market for any period of time.

Earlier this year, in the same patent case, a federal jury also awarded I4i $200 million in damages in the case. That amount, in part, was reached by determining that a reasonable royalty for the XML feature was $98 per copy of Word, a figure that Microsoft noted in Tuesday's court filing is more than the retail price of some editions of Word.

For its part, I4i chairman Loudon Owen said last week that his company isn't seeking to crush Word, but rather just to get Microsoft to stop infringing on his company's patents. Owen declined to say what, if any, settlement talks have been taking place between the two companies.

Updates:
In a statement Tuesday, Owen added that the appeal was "fully expected given the significance of the case and the flagship status of Microsoft Word to the defendant. I4i will continue to vigorously enforce its patent," he added. "We firmly believe the jury verdict and judgment were both fair and correct and we have been vindicated through this process."

Microsoft spokesman Kevin Kutz added the following statement:

Today, Microsoft filed a motion with the Court of Appeals for the Federal Circuit to seek an expedited review of its appeal and to stay the permanent injunction while the appeal is pending. These filings are not unusual in patent cases. As we've maintained throughout this process, we believe the evidence clearly demonstrates that we do not infringe and that the i4i patent is invalid. We look forward to filing our appeal and to Court of Appeals review.

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 TJ - August 18, 2009 2:37 PM PDT
Hi Ina,

Your phrase "a federal jury also awarded Microsoft $200 million in damages" directly contradicts the statement made in your earlier referenced article that says "ordered Microsoft to pay $200 million". "Awarded" typically means "given to" not "ordered to pay".

I'd fix that right away, so no one gets confused.
Reply to this comment
by Seaspray0 August 19, 2009 9:13 AM PDT
I agree. It does sound confusing when you are "awarded" a damage.
by geotopia August 19, 2009 1:21 PM PDT
The lower court having ruled, grants an award and the award is based upon the claim for damages, which is stated "granted an award for damages" and understood to mean MS must pay for damages. As they go on to the Appellate Court, they have to either pay the damages or pay a Supersedeas Bond for a stay on collection of the lower court damages. It's hard to collect an award if the losing party is fly-by-night because they can just avoid paying and eventually declare bankruptcy. Obviously MS isn't going to do this, but they don't want to front the $200M because if they win the appeal, they'll have the shoe on the other foot trying to RE collect the money, which is why they would post the Bond. However, they are asking for a waiver which I would assume leaves them subject to collection of the $200M which, because they are not indigent or transient, they can be forced by court order. Whatever MS executive that refuses to pay the award can end up doing jail time for contempt of court.

However, we're looking at an Emergency Appeal over 60 days and all of this stuff would take several months to play out, so MSFTs gamble is to get the injunction lifted, sell their wares, and push through a major legal assault on I4i in the next 60 days. Keep from paying the $200M, keep on shipping product, and fight the original judgement by Appeal, ongoing. With their resources, they can no doubt accomplish that unless they get a very strict Appeals panel and the lower court responds quickly to issuing judgement writs (you convert a court ruling into a writ of execution in order to collect, or to put a judgement lien on the other party's property, which would be Bill Gates house (if he was jointly or severably liable) or at least the Redmond Campus. Once the lien is filed, the I4i can go back to the court and get a Replevin for Sale, which would force MSFT to sell the property or pay the lien. Obviously they don't want to sell the property or add I4i to the title deed, so they would pay.

And that's a judgement award and how you would collect if you were I4i. The injunction is just according to the findings of fact and conclusions of law rendered by the lower court, but in reality it's obviously a form of extortion because MSFT stands to lose so much by stopping sales. I'll bet dollars to donuts the whole matter is wrapped up before the October deadline, but MSFT is going to use that time to reduce the leverage I4i has over them with the judgement award and injunction.
by CoffeeGroupUSA August 18, 2009 2:44 PM PDT
snip: "Earlier this year, in the same patent case, a federal jury also awarded Microsoft $200 million in damages in the case. That amount, in part, was reached ..." You mean "awarded I4i?"
Reply to this comment
by geotopia August 19, 2009 1:25 PM PDT
"I4i was awarded damages of $200M against MSFT" or "MSFT was ordered to pay an award for damages to I4i in the amount of $200M" would be correct statements.
by jtjt145 August 18, 2009 3:10 PM PDT
Everybody except lawmakers and judges know that intellectual property on software is bad for society and in the long run will ruin the country that upholds it.
Having said that, I also know that Micro$oft is experiencing now first hand what they did month ago to another company, much smaller company, of which I suspect the majority of readers here would not even know about.
In addition, Micro$oft has been threatening the open source community for years with litigation over alleged intellectual property, without even stating which of the intellectual properties was infringed upon. They do this, because it appears to be a wonderful tool keeping smaller competitors out of 'their' market.

So in this case, even though I see Micro$oft being wronged by yet another software IP bully, my heart fails to feel any sympathy for the big Monopoly in Redmond Washington.

Arthur
Reply to this comment
by sanenazok August 18, 2009 5:49 PM PDT
in other words different justice for different defendants, eh?
by TheReaperD August 18, 2009 11:28 PM PDT
Actually, I think his point was that software patents are bad and need to be thrown away in general but, it's nice to see this multi-headed monster that large companies created to keep small companies from competing with them finally bite them in the ass.
by geotopia August 19, 2009 1:26 PM PDT
Name the parties and venue of the other case please.
by jjb6 August 21, 2009 6:28 AM PDT
Everyone except lawmakers and judges? Wow! what a broad sweeping ignorant comment.

IP has a place in this country, including a line in our Constitution. The interpretation of how to allow innovation without others raiding the inventive work, may be up for debate, but the idea of granting a patent is not. Can you cite one country that attempts to uphold the Software IP rights and is ruined by this behavior? It seems to me you are mixing up IP with the ability to monetize open source based software.

I can cite the opposite. China and India both struggle to copy IP from the Western world because their own innovation suffers due to lack of controls to protect IP.

Hey at least they work for cheap.
by tektaktyks August 18, 2009 3:16 PM PDT
i dunno about that but did u hear about them jamaicans and the gene they have...thats from smoking all that pot i bet
Reply to this comment
by odubtaig August 18, 2009 3:24 PM PDT
$98 per copy of Word? More than the retail price of Word? I can get MS Office Home and Student OEM for less than that! http://www.ebuyer.com/product/160735 including VAT at a conversion rate of 1.65531 today is $89.4694

One thing's clear, it's not just patent law that needs reforming. I don't care how prestigious this guy is or how carefully he was chosen; someone, somewhere, ****** up.

Anyone who's spent more than five seconds around here knows I'm no fan of Microsoft but some things are just plain wrong.

Also good to see MS are pushing to have the patent invalidated. It may or may not affect ODF (latest analysis says nay but I'd like to see that from a company with the resources to really look at it) but it's not good for anyone to have a shonky patent on the books.
Reply to this comment
by Vegaman_Dan August 18, 2009 5:05 PM PDT
Make no mistake, this isn't the first time this person has been involved in this sort of thing. It's... well, his specialty.
by t8 August 19, 2009 12:35 AM PDT
I can use Google Docs for free.
I don't need MS Word. It is irrelevant.
by Seaspray0 August 19, 2009 9:16 AM PDT
The judge in this case also has a reputation of always siding with a copywrite holder.
by odubtaig August 19, 2009 9:40 AM PDT
There's siding with and then there's just being an outright lunatic.
by geotopia August 19, 2009 1:30 PM PDT
I believe that this is not an issue of copyright but of IP through the laws governing patents. If it were copyright, the plaintiff could pursue statutory damages that could add up into the $Bs of dollars ($30K per instance). Because MS states a retail price of $98, that's what the court used. Equitable Estoppel forces MSFT to accept what they said in one place (stickers, catalogs, price lists) as a matter of fact in the court, so it doesn't matter if you can use "Google Docs" for free, that's irrelevant and immaterial before the Court and I don't think MSFTs lawyers would even be so stupid to use that as an argument to reduce the judgement award.
by Random_Walk August 18, 2009 3:31 PM PDT
...in other news, Water was discovered on planet Earth today, the majority of porn viewers were discovered to be men, and trees are still mostly green during the summertime.

Seriously - did anyone not think Microsoft was going to ask for a stay on one of the biggest products they sell?
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by Gromit801 August 18, 2009 4:07 PM PDT
Who needs Office anyway? OpenOffice is as good, and free.
Reply to this comment
by Vegaman_Dan August 18, 2009 5:07 PM PDT
... and also affected by this same patent. They just aren't being gone after at the moment. No money in it.
by TheReaperD August 18, 2009 11:33 PM PDT
Actually the company, i4i, has said that they believe that OpenOffice does NOT infringe on their patent. URL: http://gcn.com/Articles/2009/08/17/Federal-future-Microsoft-Word-uncertain.aspx?Page=2
by acousticb1-2009 August 19, 2009 9:51 AM PDT
yeah but it is unfair. WHat if they went after Open office or other software.
by phreek86 August 18, 2009 6:22 PM PDT
After reading through the patent claims and description, my interpretation is that it just looks like a poor implementation of the concept behind XSL. A patent for electronic document transformations? Seriously?
Reply to this comment
by odubtaig August 19, 2009 8:55 AM PDT
Nope. XSL specifically relies on tags within the XML document while this patent can only possibly apply to documents in which no tags exist. It's about externally applied formatting which relies on a mapping of the content document.
by Mr. Dee August 18, 2009 6:24 PM PDT
I wonder who is gonna have the last 'Word' on this one? ^_^
Reply to this comment
by phreek86 August 18, 2009 6:40 PM PDT
Well played...
by Random_Walk August 19, 2009 6:29 AM PDT
Cute :)

I figure Microsoft will quietly make some sort of licensing deal, then quietly drop the subject ($200m ain't much to them),
by Mproject August 18, 2009 7:09 PM PDT
Microsoft will someday stop being the bully.
Reply to this comment
by Kwasiowusu August 18, 2009 11:27 PM PDT
@ Mproject : "Microsoft will someday stop being the bully."

And maybe, you will stop being an Apple shill and a troll some day. Naaaaaah. Not gonna happen.
by t8 August 19, 2009 12:36 AM PDT
They will stop bullying when it becomes economically unviable to do so.
by Kwasiowusu August 19, 2009 1:36 AM PDT
@ t8, you mean stop bullying like how the bullies at Apple continued to intimidate and threathen an 11 year old girl, who's iPod's exploded on her , and nearly set fire to their house and do her grievious bodiliy harm as well, no?
Or bullying tactics like how Apple arbitrarily banned Google Vioce and other apps from Apple's appstore?

"Let?s talk quickly about Google?s official client app for Google Voice. It?s not the only thing I?m mad about, but it was the final straw.
To recap: Not only was the app rejected, but Apple pulled several other third-party Google Voice apps that had already passed the approval process while still leaving those developers on the hook for refunds to customers with misplaced anger about the removal.

Fact: AT&T sells Blackberries that can run an official Google Voice client. No problems there.
Fact: Apple continues to sell iPhone apps that permit you to send free SMS messages. No problems there either.
Fact: You can still do everything that the Google Voice app would have done by accessing the web interface through Safari, albeit slightly less conveniently. I doubt they?ll pull Safari from the iPhone, although that would be the logically consistent thing to do.
I haven?t heard a single explanation for the rejection of the Google Voice app that makes a shred of sense at all."
http://stevenf.tumblr.com/post/152606616/important-note-references-to-i-in-this-post

If you want to find by far the biggest bullies in techdom by far, you need go no further than Apple.
by odubtaig August 19, 2009 9:05 AM PDT
Interesting logic. So, because Apple behave unethically (and we all know how they like to silence dissent in the ranks) that somehow magically excuses everything MS does? Do me a favour...

That'd be like me saying that Stallman's somewhat aspergic personality traits should be ignored because Ballmer's such a moose. Doesn't work.
by t8 August 20, 2009 1:34 AM PDT
@ Kwasiowusu

Yeah, I don't care about Apple or Microsoft.
I care about the Web and therefore Google is nore important because the Web is the biggest thing since sliced bread.

Why do some people think that anit-microsoft comments are only made by Apple shills.
Get over it. Lot's of people dislike Microsoft and probably aren't that impressed with Apple either.
by August 18, 2009 8:59 PM PDT
MS is a convicted monopolist that has not paid its debt to society for the harm it has caused. I have no pity for them, and also declare it is not unlawful to pirate MS software until they set themselves right with the law.
Reply to this comment
by Mark_Anderson August 19, 2009 8:49 AM PDT
What harm?

Shut up, moron.
by Earth16 August 19, 2009 8:50 AM PDT
Once again, becoming a "monopolist" is not a crime for which a company can be "convicted." The offense is using monopoly status in violation of anti-trust laws to stifle competition.
by Dalkorian August 19, 2009 10:38 AM PDT
Actually, it is still unlawful to pirate M$ software but more importantly it's not very intelligent. M$ trashware isn't worth pirating, nor is it worth using for free. Considering their history with security, I'd argue it's actually pretty stupid to use any version of their trashware, let alone pirated versions of it.
by magicmaster August 18, 2009 9:10 PM PDT
"...the public will "face hardship" if Word or Office is absent from the market for any period of time. "

Me? I am fine with my Office 2003, and many still use the 2000, XP, or 97 version.
The public won't face hardship. Judging by the history of MS bullying others, I have no sympathy for MS.
Reply to this comment
by acousticb1-2009 August 19, 2009 9:50 AM PDT
yeah but we all would be guilty of infronging just because we owned the software that is my fear
by Mproject August 19, 2009 3:20 AM PDT
Kwasiowusu
Sorry to dissapoint you. I don't have an Apple Computer. There no better than Microsoft.
Reply to this comment
by Dalkorian August 19, 2009 10:39 AM PDT
Don't feed the prostitutes.
by ajdnyc August 19, 2009 8:19 AM PDT
It would be helpful if you would include the name of the case, the case number, and the name of the district court in which the case originated to make it easier for people to find court papers or other information about the case. You mentioned the Federal Circuit where the appeal is pending, but not the district court. Thanks, Al.
Reply to this comment
by acousticb1-2009 August 19, 2009 9:49 AM PDT
Yeah I wouldnt mind finding where it goes. I think it is wrong for them to cut off word sales. That is stupid
Reply to this comment
by jake3373 August 19, 2009 10:35 AM PDT
Yeah. I know millions of products (including some programs I wrote myself) that use XML. But, of course, they just go to the biggest money-maker, Microsoft.
by geotopia August 19, 2009 1:04 PM PDT
I can't believe the audacity of MS asking for a stay (on appeal) and simultaneously asking the lower court for a bond waiver. Normally, if you want to go on to appeal the lower court, you have to either pay the award granted the other party, or post a Supersedeas Bond against the award. MS wants their cake and to eat it too. What's ironic about this is usually the grounds for waiver is indigent condition of the applicant, meaning they are too POOR to pay the bond! What a laugh! But it's more a cry because MS will probably get everything they ask for!
Reply to this comment
by setjeff15081947 August 19, 2009 1:58 PM PDT
Ina Fried - Henkie - Reporting! "Bleah!" [Charlie Brown of "Peanuts"]
Poor, unloved, mis-guided Microsoft®; they won't own the whole !@#$%^&*() World anymore. And we can take the "Awarded-Damages" out of Mr. Bill's Charity Fund. No, I'm not angry; just another duped Vista® user.
Silver Lining - I've been looking to buy some MSFT.N ... at the right price.
Reply to this comment
by dwightgenius August 19, 2009 6:56 PM PDT
Not only in Word,MS may meet challenges when releases PowerPoint 2010,the new ******** to make PowerPoint presentation to play on the Web may not attract too much attention,because lots of such solutions existed long time ago,like http://www.slideshare.net/ (a provider of uploading and sharing PowerPoint presentations, Word documents and Adobe PDF Portfolios on Internet) and http://www.dvd-ppt-slideshow.com/ (a professional powerpoint to dvd/video solution provider)
Reply to this comment
by August 20, 2009 10:05 AM PDT
As in the 1990's when they used the courts to bully competing, and much better, programs than their own, Microsoft is again attempting to bully i4i. They don't compete, they use institutions rather than the allowing the free market and consumers to make decisions, and it's stupid that most people let them get away with letting the courts dictate our choice.
Reply to this comment
by odubtaig August 21, 2009 1:36 AM PDT
As much as it's like watching Tony Montana get mugged by Tommy DeVito, they're still the victim here.
by gengaretjax September 19, 2009 6:37 PM PDT
Generally, speaking the lawsuit was garnered by the smaller company l4i. Unawares as many of you are this has wide and long ramifications for all things web related. Nearly, all web services, applications, ajax (web2.0) websites utilize xml/xsl transformations for conversions. If Microsoft loses this battle with regards to their Office Application then we may very well see many other licensing issues with xml/xsl transformations. This would in turn make web2.0 problematic due to licensing issues. As a result every website currently utilizing this tech would then be required to 'update'.

This is not about Microsoft, Apple or Open Source...this is more about who has the right to patent on technology that is fundamental to application open connectivity. Microsoft is actually pursuing the right action in this case and is seeking to protect open standards by way of appealing an unfair ruling.

The patent if upheld will impact all Mfr of software, services and website that utilize transormations...
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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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