Microsoft Patent Lawsuit Could Spell Trouble for Open-Source Format

Microsoft Word was ruled in violation of an XML-related patent by a Texas judge, who ordered Microsoft to stop selling its productivity suite and pay a small Canadian company, i4i, nearly $300 million. However, the lawsuit could also present trouble down the road for XML-based OpenDocument Format, an open-source alternative for spreadsheets, word-processing and other productivity applications.

The court ruling that Microsoft violated an XML-related patent held by i4i, a small Canadian company, could threaten not only Redmond, but also the open-source community.  

"If the validity of the patent is upheld then the immediate question is whether this will also impact ODF [OpenDocument Format]," Brian Prentice, an analyst with Gartner, wrote in an Aug. 12 blog posting. "If so, then this turns out to be a significantly more important issue and one which will crystallize the fury of the anti-patentistas."

The XML-based OpenDocument Format was originally designed as an open-source alternative for spreadsheets, word-processing and other productivity applications. Over the course of its development, ODF has found itself integrated into both open-source and proprietary software; Microsoft plans to port the ODF support originally added to Office 2007 in SP2 over to Office 2010, allowing users to save files in ODF format and open ODF documents in Office applications such as Word, Excel and PowerPoint. Open-source productivity suites such as OpenOffice.org also rely on the format. 

While XML is a public-domain format, and i4i's patent focuses on "custom XML," a court ruling that solidifies i4i's position as a leverager of the technology could potentially allow it to launch patent-infringement lawsuits against applications such as the upcoming ODF 1.2, which will reportedly rely on a custom XML format similar to that already present in Microsoft Office 2007 applications.

That could open a company utilizing ODF 1.2 or similar technology to a lawsuit akin to the one bludgeoning Microsoft. On Aug. 11, a U.S. District Court in East Texas filed a permanent injunction against Microsoft, banning the company from "selling, offering to sell, and/or importing in or into the United States any Infringing and Future Word Products that have the capability of opening a .XML, .DOCX or .DOCM file ('an XML file') containing custom XML."

Conceivably, this could yank both Microsoft Word 2003 and Microsoft Word 2007 from store shelves within 60 days. In addition, the judge leveled fines against Microsoft to the tune of nearly $300 million, not exactly a drop in the proverbial bucket during a period of declining quarterly revenues. However, Microsoft fully intends to appeal the verdict and the related injunction, meaning that the case will likely drag on well past that two-month mark.

But Microsoft may also have an escape, thanks to a patent issued to it on Aug. 4 by the U.S. Patent and Trademark Office. Patent 7571169 describes a "word-processing document stored in a single XML file that may be manipulated by applications that understand XML." If integrated into Word, that technology could conceivably allow Microsoft to sidestep the complaint from i4i.

"There is another interpretation that I fear will be lost in the noise," Brian Prentice wrote in his note. "That is some introspective consideration of whether there is actually a rampant disregard in the software industry for other's property rights. If it is not just .docx but also ODF that infringes then that could be seen as some pretty significant oversight, potentially even arrogance, on the part of Microsoft, Sun Microsystems and OASIS."

"Given that Microsoft was aware of i4i's patents," Prentice added, "one wonders why they didn't just buy them (at a significantly reduced price then what they might end up paying now) and then target ODF for license agreements like they're doing with their patent infringement claims against Linux."

East Texas has a history of being the place for small companies to file patent lawsuits against IT giants, but most of those cases tend to quietly fade away. There are signs, however, that the i4i judgment could have a far wider ripple effect than initially thought.