Microsoft's Week Marked by i4i Case, Paul Allen Memoir, Nokia Deal

Microsoft's week involved a U.S. Supreme Court case with i4i, co-founder Paul Allen's memoir hitting shelves, and a signing of the Nokia phone deal.

Microsoft's week kicked off in a particularly noteworthy way, with the company's legal counsel arguing April 18 before the U.S. Supreme Court that the longstanding standards for patent infringement should be lowered.

Microsoft and Canadian firm i4i are concluding a years-long court battle, sparked by the latter claiming Word 2003 and 2007 violated its patents for custom X M L. Chief Justice John Roberts, who apparently owns Microsoft stock, recused himself from the case. Out of the remaining eight justices, Microsoft must win five votes in order to succeed in its appeal and overturn earlier rulings in i4i's favor.

Microsoft's counsel argued that the overwhelming evidence needed to invalidate patents makes it too difficult for companies to beat back frivolous patent-infringement suits, and that the standard of proof needs to be lowered.

However, i4i argued that the precedent is a sound one.

"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."

Microsoft first asked the Supreme Court to hear its appeal in August, seeking to overturn earlier rulings concerning i4i's patents. The previous April, a federal appeals court had rejected Microsoft's request for a multiple-judge review of the lawsuit, which resulted in a nearly $300 million judgment. The bulk of Microsoft's troubles, though, began in August 2009, when a federal judge for the U.S. District Court in Eastern Texas ruled in i4i's favor and ordered that all copies of Word 2003 and 2007 be removed from store shelves.

Although Microsoft eventually issued a patch for Word that it insisted would sidestep the alleged infringement, it has been battling the case through the court system ever since. The Supreme Court case is filed under Microsoft Corp. vs. i4i Limited Partnership and Infrastructures for Information, No. 10-290. The judges could hand down a decision by the end of June.

"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 response to eWEEK's query about the Supreme Court case's ramifications. "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."

The day after Microsoft's April 19 appearance at the Supreme Court, the company found itself somewhat in the spotlight again, with the release of co-founder Paul Allen's memoir "Idea Man."

The early parts of the book portray a young and driven Bill Gates, balanced somewhat by Allen, who takes pains throughout his narrative to downplay both his ambitions and strengths in areas like mathematics. Having founded Microsoft in 1975, the two worked to make their baby a force in the then-nascent software industry.

Despite Gates' and Allen's mutual love of programming, the book details how tensions soon developed between the two. At one point, Allen accuses Gates and Steve Ballmer-the latter now the company's CEO-of scheming to reduce his stock options in the company.

"One evening in late December 1982," he wrote, "I heard Bill and Steve speaking heatedly in Bill's office and paused outside to listen in. It was easy to get the gist of the conversation. They were bemoaning my recent lack of production and discussing how they might dilute my Microsoft equity by issuing options to themselves and other shareholders."

Although Gates and Ballmer apparently tried to patch things up, Allen eventually resigned his post. Microsoft stock eventually made him a billionaire, and he parlayed the cash into business ventures including the Seattle Seahawks and a stake in DreamWorks Animation.

In his book, Allen bemoans how Microsoft has lost some of its early aggression. "Complacency has taken its toll, most tellingly in the newest competitive areas of smartphones and tablets, like the iPad," he wrote. "History shows that you ignore emerging platforms at your peril, because one of them might make you irrelevant."

In their next step to combat those emerging platforms, Microsoft and Nokia signed a definitive agreement to partner on Windows Phone 7. Under the terms of that agreement, Nokia will manufacture devices loaded with Microsoft's Windows Phone 7, a mobile operating system that eschews the iPhone's or Android's grid-like screens of individual applications in favor of subject-specific "Hubs." Both Microsoft and Nokia have lost substantial ground to mobile competitors such as Google and Apple in recent years, and the partnership is viewed as a way for both to reestablish momentum.

"With the definitive agreement now signed, both companies will begin engaging with operators, developers and other partners to help the industry understand the benefits of joining the new ecosystem," read a joint statement issued April 21. "At the same time, work will continue on developing Nokia products on the Windows Phone platform, with the aim of securing volume device shipments in 2012."

During the MIX11 conference in Las Vegas earlier in April, Microsoft touted Windows Phone 7 as being ideal for third-party developers. Future additions to the platform include the introduction of Angry Birds in May, Skype and a Spotify music application sometime in the autumn, and a massive software update, code-named "Mango," which will introduce augmented reality capability, Internet Explorer 9 and a version of multitasking. Mango's actual release date remains unclear, however.

According to recent data from analytics firm comScore, Microsoft's share of the smartphone market dipped to 7.7 percent for the three months ending in February-down from 9 percent in November 2010, and a sufficient drop to place the platform behind Google Android, Apple's iOS and Research In Motion's BlackBerry franchise.