Microsoft late Tuesday filed its formal appeal of a patent infringement ruling that threatens to halt sales of Word in its current form.
In May, a jury ordered Microsoft to pay $200 million for infringing on a patent held by Canada's I4i. Earlier this month, a federal judge increased that monetary award and also issued an injunction barring sales of Word that include the custom XML code found to infringe on I4i's patents.
"We believe the court erred in its interpretation and application of the law in this case and look forward to the September 23 hearing before the U.S. Court of Appeals," Microsoft spokesman Kevin Kutz said in a statement.
In its papers, Microsoft makes a number of arguments for overturning the infringement finding, saying that the judge made several procedural errors and failed to live up to his role as "gatekeeper."
"In patent cases, even more than most, the trial judge's role as a gatekeeper is crucial," Microsoft argued in its appeal. "As gatekeeper, the judge must define the metes and bounds of a patent through claim construction and then ensure that the evidence presented by the parties' numerous experts is both reliable and rooted in the facts of the case at hand. And after the jury has rendered its verdict, it is the judge who, before allowing that verdict to become an enforceable judgment, must ensure that the verdict is adequately supported by the evidence and supportable under the law...This case stands as a stark example of what can happen in a patent case when a judge abdicates those gatekeeping functions."
For its part, I4i has praised the ruling and said that it is not seeking to torpedo Word, but does want the infringing custom XML code removed.
"We're not seeking to stop Microsoft's business and we're not seeking to interfere with all the users of Word out there," I4i Chairman Loudon Owen told CNET News earlier this month.
In a statement on Wednesday, Owen called Microsoft's document "extraordinary."
"It captures the hostile attitude of Microsoft toward inventors who dare to enforce patents against them," Owen said. "It is also blatantly derogatory about the court system."
Owen said that the company is counting on the court system to help it prevail even in the face of Microsoft's massive legal firepower.
"We do not have the gargantuan financial resources of Microsoft, but i4i has the protection of fairness under the U.S. justice system. Microsoft is not above the law. It cannot privately expropriate I4i's patented invention."
Owen said that I4i's response brief is due to be filed by Sep. 7. "We firmly believe the decision of the jury and judge in the United States District Court for the Eastern District of Texas was correct on the facts and we shall prevail on appeal," Owen said.
Microsoft has already gotten the appeals court to set a September 23 hearing to weigh an appeal of the case and potentially hold off the injunction, which is slated to go into effect in October.
In addition to pursuing its appeal, Microsoft has other options including creating a technical workaround, removing the XML function, or reaching a settlement with I4i.
A federal appeals court has scheduled a hearing next month to decide whether to uphold a ruling that would force Microsoft to stop selling Word in its current form.
A district court judge last week issued an injunction that would halt sales of any version of Word that includes a custom XML function that was found by a jury to infringe on a patent from Canada's I4i. In May, that jury also dinged Microsoft with $200 million in damages, an amount that the judge hiked to more than $290 million at the same time he ordered the injunction, which he scheduled to go into effect 60 days after the Aug. 11 ruling.
In a statement, I4i said that Microsoft's appeal will be heard on Sept. 23. Microsoft had asked for an expedited hearing on the matter.
"We firmly believe that the U. S. District Court made the right decision on the merits of the case," I4i Chairman Loudon Owen said in a statement. "We are confident that we will prevail on the appeal."
Owen said that I4i welcomes the speedy hearing. "This is a vital case for inventors and entrepreneurial companies who, like i4i, are damaged by the willful infringement of their patents by competitors; particularly competitors as large and powerful as Microsoft."
In addition to the appeal, Microsoft could also pursue a technical workaround that allows the custom XML function to work in a different way that doesn't infringe on I4i's patent, remove that feature from word, or pursue a settlement.
For its part, Owen told CNET News last week that I4i isn't seeking to see Word pulled from the market, but rather just to get Microsoft to stop infringing on his company's patents.
Microsoft was not immediately available for comment.
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.
Microsoft on Wednesday announced it has reached a settlement agreement with Primax Electronics, a mouse maker the software company sued in July for patent infringement.
As part of the settlement, Primax has entered into a nonexclusive licensing agreement that covers Microsoft's patents for U2 and Tilt Wheel technology, for both past and future sales of relevant Primax products in the United States. The rest of the settlement terms are confidential.
Microsoft sued the Taiwan-based company over seven patents related to U2 technology, which allows a mouse to connect to either a PS/2 or USB port and auto detect which is being used, and TiltWheel technology, which relates to cursor movements accomplished through tilting a mouse. The suit, brought before the U.S. District Court in Northern California and the International Trade Commission, attempted to bar infringing Primax products from entering the U.S.
The software giant began licensing its patents in late 2003 and now has more than 500 licensing agreements in place. There are more than 30 licensees from the mouse and keyboard industry in the patent licensing program that covers Microsoft's U2 and Tilt Wheel. Microsoft had made repeated attempts to arrange a licensing agreement with Primax before pursuing litigation, the company said.
"IP collaboration encourages shared industry success by allowing licensees to incorporate innovative technologies, powered by Microsoft IP, into their products to provide enhanced features to their customers," said Horacio Gutierrez, Microsoft's vice president and deputy general counsel of intellectual property and licensing.
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