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Microsoft loses $200m patent verdict
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WASHINGTON: Microsoft Corp, the world's largest software maker, was ordered by a federal jury to pay $200 million to a Canadian company over a patented way to process electronic documents in Microsoft's Word products.
A federal jury in Tyler, Texas, found that Microsoft infringed a patent owned by closely held i4i LP. The award is the amount sought by i4i, which claimed that Microsoft willfully used the patent.
The judge can increase the damage award based on the willfulness finding, and i4i can seek a court order blocking further use of its invention.
Microsoft said it would fight the verdict.
"We believe the evidence clearly demonstrated that we do not infringe and that the i4i patent is invalid," said David Bowermaster, a Microsoft spokesman. "We believe this award of damages is legally and factually unsupported, so we will ask the court to overturn the verdict."
It's the fourth-largest jury verdict in the US so far in 2009, according to data compiled by Bloomberg. It's the second-largest patent jury award this year, behind a $388 million verdict against Microsoft won by a Singapore company in April.
Yesterday's $200 million award equals about four days of profit for the company, based on fiscal second-quarter net income of $4.17 billion on sales of $16.6 billion.
Embedded codes
The i4i dispute is over a method of processing electronic documents using embedded codes that provide instructions on how information appears.
Word 2003 and 2007 use "extensible markup language", or XML, for encoding, and customize the XML in a way that closely held i4i contends infringes its patent. Both sides agree that many people use Word without ever using custom XML.
"E-mails from Microsoft show they knew about the patent and infringed to make i4i products obsolete," said i4i lawyer Douglas Cawley.
Microsoft, based in Redmond, Washington, argued at the trial that it didn't use i4i's technology and sought to invalidate the patent.
Microsoft's Windows software runs about 95 percent of the world's personal computers. Windows Vista, the company's current operating system, wasn't part of the case.
A federal jury in Tyler, Texas, found that Microsoft infringed a patent owned by closely held i4i LP. The award is the amount sought by i4i, which claimed that Microsoft willfully used the patent.
The judge can increase the damage award based on the willfulness finding, and i4i can seek a court order blocking further use of its invention.
Microsoft said it would fight the verdict.
"We believe the evidence clearly demonstrated that we do not infringe and that the i4i patent is invalid," said David Bowermaster, a Microsoft spokesman. "We believe this award of damages is legally and factually unsupported, so we will ask the court to overturn the verdict."
It's the fourth-largest jury verdict in the US so far in 2009, according to data compiled by Bloomberg. It's the second-largest patent jury award this year, behind a $388 million verdict against Microsoft won by a Singapore company in April.
Yesterday's $200 million award equals about four days of profit for the company, based on fiscal second-quarter net income of $4.17 billion on sales of $16.6 billion.
Embedded codes
The i4i dispute is over a method of processing electronic documents using embedded codes that provide instructions on how information appears.
Word 2003 and 2007 use "extensible markup language", or XML, for encoding, and customize the XML in a way that closely held i4i contends infringes its patent. Both sides agree that many people use Word without ever using custom XML.
"E-mails from Microsoft show they knew about the patent and infringed to make i4i products obsolete," said i4i lawyer Douglas Cawley.
Microsoft, based in Redmond, Washington, argued at the trial that it didn't use i4i's technology and sought to invalidate the patent.
Microsoft's Windows software runs about 95 percent of the world's personal computers. Windows Vista, the company's current operating system, wasn't part of the case.
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