Microsoft, Open-Source Community Could Both Avoid Lawsuit Damage

Microsoft found itself ordered to stop selling current versions of Word, as well as pay millions in fines, to a small Canadian company, i4i, over an XML-related patent violation. However, Microsoft has both legal appeals and code-based workarounds that could prevent it from being damaged by the ruling. An analyst suggested that the relevance of i4i's XML patent may prove short-lived.

When a U.S. District Court judge in Texas ruled that Microsoft had violated an XML-related patent held by i4i, a small Canadian company, the verdict seemed to potentially threaten both Microsoft and the open-source community.

As part of the verdict, Microsoft was banned 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 .DOCX or .DOCM file (-an XML file') containing custom XML." Microsoft was given 60 days to yank both Microsoft Word 2003 and Microsoft Word 2007, both of which supposedly violated i4i's patent, within 60 days.

The lawsuit also had the potential to affect the open-source community, particularly the XML-based OpenDocument Format (ODF), the open alternative for spreadsheets, word-processing and other productivity applications. While XML is a public-domain format, and ODF does not violate the "custom XML" detailed in i4i's patent, there was a possibility that the upcoming version of the format, ODF 1.2, could potentially have a legal hurdle since it supposedly contains XML customized beyond the traditional boundaries of open XML.

Since the announcement of the verdict, though, several ways have been suggested for Microsoft to potentially shake itself loose of i4i's lawsuit.

First, Microsoft could simply remove or disable the offending code, which would allow the current versions of Word to be sold. It could also substitute its own technology; 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." Inserting that into either the current or future versions of Word would allow them to potentially circumvent the ruling.

Even with a technological workaround, that leaves Microsoft to deal with the fines leveled against it by the ruling, which currently approach $300 million. In a statement to eWEEK, a Microsoft spokesperson said that the company intends to appeal the decision, which could potentially tie the matter up for years.

One analyst suggested that i4i patented technology could soon be superseded by Microsoft's own patented XML technology.

"My quick take is this: i4i is a pretty small company that makes an XML Word plugin, one of about 4-5 vendors that do this, and this is a threatened segment going forward as Microsoft continues to add XML functionality to Word," Melissa Webster, an analyst with IDC, wrote in an e-mail to eWEEK. "I can't comment on the validity of i4i's patent infringement claims, but Microsoft is certainly an attractive target for a lawsuit-very deep-pocketed.

"The reverse is true for," Webster added. "Who do they sue, exactly?"

Indeed, while the open-source community could ensure that future versions of ODM do not include any code that would place it in violation of i4i's patent, the somewhat nebulous nature of that community would also shield it from potential lawsuits.

The verdict may represent an early victory for i4i, but there are signs that the issue could drag on for many months to come.