Earlier this week i4i Limited Partnership announced that the United States Patent and Trademark Office confirmed the patentability of all claims of the U.S. Patent 5,787,449. The ‘449 patent was being reexamined by the USPTO at the request of Microsoft after the Redmond giant lost close to $300 million as a result of infringement of the i4i patent. Most importantly, however, Microsoft was ordered to stop selling copies of Word that have the capability of opening a .XML, .DOCX, or .DOCM file (“an XML file”) containing custom XML. See Patent Injunction: Microsoft Ordered to Stop Selling Word.
Those who have been following the i4i v. Microsoft case will recall that on August 11, 2009, the United States District Court Judge in the Eastern District of Texas issued a final order in the matter of i4i v. Microsoft. The final order was for Microsoft to pay close to $300 million, but worse yet for Microsoft, Judge Leonard Davis also entered a permanent injunction that was to become effective 60 days from the judgment date, ordering Microsoft to cease selling the ubiquitous word processing program Word. On August 21, 2009, the United States Court of Appeals for the Federal Circuit issued an Order granting Microsoft an expedited appeal of its patent infringement loss to i4i Limited Partnership. Oral arguments were also granted in expedited fashion, and were held on September 23, 2009. Then on December 22, 2009, the Federal Circuit issued its decision gave i4i an early Christmas present and affirmed the issuance of the permanent injunction, which went into effect on January 11, 2010.
Microsoft had been hoping that the USPTO would rule that the claims, or at least some of them, were invalid and should never have been issued. Had the USPTO ruled that i4i claims could not survive reexamination review, or that the claims on which Microsoft lost were too broad and needed to be amended during reexamination, Microsoft could have used this to go back to court and seek to have the underlying district court decision overturned. It might not have been an easy battle, but Microsoft would have had at least some leg to stand on in post-trial motions. With the USPTO finding that the claims survive reexamination Microsoft’s options are now dwindling, and an appeal to the United States Supreme Court may be Microsoft’s only remedy short of taking a license to the i4i patent. According to Reuters, Microsoft is already contemplating an appeal to the Supreme Court.
Loudon Owen, Chairman of i4i, speaking about the result of the USPTO reexamination said: “This is a very material step in our litigation against Microsoft. Put simply: i4i’s patent is clearly and unequivocally valid. Even though Microsoft attacked i4i’s patent claims with its full arsenal, the Patent Office agreed with i4i and confirmed the validity of our ‘449 patent.” Mr. Owen added, “the protection of patents and intellectual property is vital to small inventors and pioneers, like i4i, especially when confronted by giant industry competitors like Microsoft.”
Michel Vulpe, founder of i4i and co-inventor, says, “i4i is naturally very pleased with the decision of the PTO. The ‘449 patent application was filed in 1994, and this has now been a 16 year journey.” Mr. Vulpe adds, “Our patent claims were put under intense scrutiny by the PTO during its reexamination and this decision is a resounding confirmation and a further validation of the ‘449 patent.” I would also point out that the ‘449 patent has not only been put through the USPTO review process twice (i.e., once initially and once during reexamination), but it was also the subject of review during the patent litigation process through the district court and to the Federal Circuit.
Microsoft had said after the final order and injunction were initially issued back in August 2009 that they could simply and easily remove the infringing functionality from Word. I initially believed that claim to be ridiculous on its face, and continue to believe it to be ridiculous. Microsoft’s actions throughout seem to suggest that they know removing the feature is not as easy as it would seem, or at least not desirable. Computer software has become increasingly complex, and any user of Microsoft products knows that many Microsoft products are already not as compatible with other software as they could or probably should be.
As also reported by Reuters, Microsoft currently contends that they have issued a fix and believe it addresses what was found to be their infringement. Notwithstanding, Owen told Reuters that he is not convinced that the Microsoft fix actually resolves the matter and fixes what had been ongoing infringement. So stay tuned. It sounds like Microsoft has not yet come to terms with the fact that i4i has prevailed, is contemplating an appeal to the Supreme Court and may not have adequately addressed the infringement issue. Things might continue to get more interesting.