Microsoft Case Not Aimed at Open-Source Community, i4i Execs Say

Microsoft filed an emergency motion on Aug. 14 in a Texas case that would have forced it to pull Microsoft Word from store shelves and pay a small Canadian company, i4i, close to $300 million in fines.

In an interview with eWEEK, i4i Chairman Loudon Owen and founder Michel Vulpe asserted that while they were determined to pursue their patent infringement case against Microsoft, many of the open-source community's fears over the patent were unfounded.

The ruling adds a new twist to the case that seemed to come to a head on Aug. 11, when a U.S. District Court in Eastern Texas ruled that Microsoft had indeed violated an XML-related patent held by i4i, and ordered the company to stop selling "any Infringing and Future Word Products that have the capability of opening a .XML, DOCX or .DOCM file ('an XML file') containing custom XML."

The patent, originally submitted in 1994, deals with XML-related formatting for a word processing program, utilizing algorithms to create a data structure called a metacode map, within which resides formatting formation. A more complex breakdown of i4i's patent by eWEEK can be found here.

The court's decision led to fears among some in the open-source community that the ruling could open the door to litigation against Open Document Format 1.2, which will reportedly rely on a custom XML format. Open Document Format was originally designed as an open alternative for spreadsheets, word processing and other productivity applications, and over the course of its development has found itself integrated into both open-source and proprietary software, including Office 2007 and the upcoming Office 2010.

Owen seemed to dismiss the open-source community's concerns in an interview with eWEEK. "We've never made any pretense … that this is anything other than patent infringement," he said. "This is not about file formats or XML or any of those things."

However, both i4i executives voiced the opinion that their patent will prove a vital one with regard to future information management.

"What we do think is the functionality it offers is a missing link in terms of future competition over the desktop," Vulpe said. "It's not about managing documents, it's about managing data; it's about the authoring tools that manage the data, not the document."

In addition to the ruling that Microsoft will need to pull copies of Microsoft Word from shelves within 60 days, Judge Leonard Davis also leveled another $40 million in fines on top of other damages accumulated throughout the proceedings, which include $37 million prejudgment interest. If the ruling is upheld, Microsoft could end up paying close to $300 million.

But Microsoft also has escape avenues, including settling out of court. The company could also potentially swap out the offending code. On Aug. 4, the U.S. Patent and Trademark Office issued Microsoft Patent 7571169, which describes a "word processing document stored in a single XML file that may be manipulated by applications that understand XML." Either that or similar technology could allow Microsoft to sidestep i4i's claims.

Small IT companies have a history of winning patent lawsuits against IT giants in the Texas court system. In 2006, for example, Anascape managed to win a $21 million judgment against Microsoft and Nintendo for allegedly violating its patents relating to game controllers; as recently as July, a tiny IT outfit named Tsera sued 23 tech giants, including Microsoft and Apple, over a touch-screen patent.

Perhaps because of this perceived David-and-Goliath reputation when it comes to the Texas legal system, 409 cases dealing with copyright, patent or trademark claims found their way into Eastern Texas U.S. District Court in 2007, a proportionally high number when compared with states such as New York, where 768 cases were filed that same year.

According to Owen and Vulpe, there were several reasons why i4i's lawsuit ended up in Eastern Texas.

"The law firm that we're using is based in Texas, and they're at the top of the heap in terms of litigation advice," Owen said. "Second, the jurisdiction is federal, so it shouldn't matter where you file. The third element we found is: There's a great deal of expertise in that jurisdiction. They're very sophisticated judges."

Microsoft has repeatedly said it intends to appeal both the verdict and the injunction, opening the prospect that the case could continue to drag for years. (The first step in this process, obviously, was the emergency motion.) Both Owen and Vulpe, however, seem determined to pursue the case as far as possible.

"Where we come from, if someone tries to take something that belongs to you, you stand up to them; you don't just reach for the calculator," Owen said. "We're not in a position to guess or second-guess or speculate as to what the court is going to do. We're here to protect our property."