Microsoft and i4i's battle before the U.S. Supreme Court has the potential to change how patents are validated and IP lawsuits fought.
Whether Microsoft wins or loses the intellectual property case currently
before the U.S. Supreme Court, patent law is likely to change in radical ways
in the near future.
If Microsoft triumphs in this last-ditch appeal to the nation's highest
court, it could establish a precedent that makes it easier for big companies to
knock down weak intellectual property lawsuits-and perhaps reduce the
phenomenon of "patent trolling," currently a thorn in the tech industry's side.
Patent trolls are companies or individuals who lodge opportunistic
patent-infringement lawsuits against others, often with an eye toward a hefty
But should the case prove a winner for Canadian firm i4i, which has argued
for years that Microsoft violated its patents for custom XML, it could
potentially help smaller companies fight larger aggressors in open court.
In its April 18 argument before the court, Microsoft's legal counsel argued
that the current standard of proof for invalidating patents is too high, making
it difficult for companies to repulse frivolous patent-infringement suits.
"When the Patent Office didn't even consider the evidence, it makes absolutely
no sense," Microsoft attorney Thomas Hungar told the court, according to an
April 18 Bloomberg report
Following that line of argument, if Microsoft wins the case, it could
potentially weaken the perception of the U.S. Patent and Trademark Office as an
arbiter of patent validity. Meanwhile, i4i touted the preservation of existing
patent law as necessary for innovation.
"It is abundantly clear that the fundamental change in the law, which
Microsoft seeks, would result in an enormous decrease in innovation," i4i Chairman
Loudon Owen wrote in an April 18 statement. "Microsoft did not present either
policy or legal reasons that would justify any changes to the law, particularly
the sweeping change they now apparently seek."
Chief Justice John Roberts, who
apparently owns Microsoft stock
, recused himself from the case. Out of the remaining
eight court members, Microsoft must win five votes in order to succeed in its
appeal, which seeks to overturn earlier rulings that Word 2003 and 2007
violated i4i's patents for custom XML.
The Supreme Court
case is filed
under Microsoft Corp. v. i4i Limited Partnership and
Infrastructures for Information, No. 10-290. The judges could hand down a
decision by the end of June. And according to some analysts, the ramifications
of that decision are huge.
"This crosses well beyond the technology industry and into every area of
patent litigation," Rob Enderle, principal analyst of the Enderle Group, wrote
in an April 19 email to eWEEK. "It would make it vastly easier for companies to
bring new products to market but harder for inventors to protect ideas that
seem obvious after the fact."
There's a reason, Enderle added, that big tech companies ranging from Google
and Cisco Systems to Apple are publicly siding with Microsoft on the case.
"There are large companies on both sides of this question, though you would
expect companies that are aggressive on bringing products to market would want
these changes," he wrote, "and those that have large patent portfolios but a
relatively stable group of products would be against the changes."
Some might have more skin in the game than others: "I think the impact of
the losing would actually be bigger on Google who currently lacks much of a
patent defense and is arguably as big a target as Microsoft, which explains why
they are on Microsoft's side on this."
Those filing briefs in support of
include 3M, General Electric and Genentech.
"The bottom line: tech vendors attacked by patent trolls are only asking for
payback by reducing the standards in patent law," Ray Wang, principal analyst
of Constellation Research, wrote in an April 19 email to eWEEK. "If Microsoft
wins, it's a check and balance against patent trolls. If i4i wins, innovators
who feel their rights have been trampled by large evil tech vendors will have
protected their rights."
Microsoft's troubles with i4i extend back to August 2009, when the federal
judge in the U.S. District Court in Eastern Texas
ordered that all copies of Word 2003 and 2007 be removed from retail channels
within 90 days, after i4i argued that the word-processing software violated its
patents for custom X M L
. Microsoft's attorneys managed to argue a delay,
only to have the U.S. Court of Appeals uphold the verdict four months later.
That upheld verdict came with the court order that all offending copies of
Word be yanked from store shelves by early January 2010. Microsoft responded by
asking for the review by all 11 judges on the U.S. Court of Appeals for the
Federal Circuit, on top of issuing a patch for Word that it insisted would
sidestep the alleged infringement.
There's also a substantial money question, as Microsoft seeks to overturn a
nearly $300 million judgment leveled by a lower court.