i4i: ‘Microsoft Destroyed Our Business’

With the appeals hearing on Microsoft’s patent infringement case just two weeks away, the plaintiffs filed their response to the software giant’s request that the smaller firm’s legal victory and damages be thrown out.

Toronto-based i4i didn’t pull any punches in its move to both counter and discredit Microsoft’s (NASDAQ: MSFT) assertions in front of the U.S. Court of Appeals for the Federal Circuit in Washington.

“Microsoft’s infringement destroyed i4i’s ability to compete in the market for its patented products,” i4i’s response said. The company, according to the filing, now primarily only has customers in the pharmaceuticals industry.

As it had during the trial, i4i said that Microsoft had needed a way to handle so-called “custom” XML (short for eXtensible Markup Language), and had represented the smaller company as its “partner” — that is, until it decided to develop its own custom XML editing capabilities in Word 2003.

Even though it knew that i4i held a patent on the technology, Microsoft, the filing says, went ahead and added the capability into Word without telling i4i.

“[I]f we do the work properly, there won’t be a need for [i4i’s] product,” the filing quotes a Microsoft executive as saying in an e-mail. “Later in 2001, before Word 2003 was released, Microsoft cut off all contact with i4i,” the filing continues.

The smaller firm sued Microsoft in 2007 over its 11-year-old patent, and won its case in the U.S. District Court for the Eastern District of Texas, Tyler Division, last May. In mid-August, the judge ruled that Microsoft had to cease selling Word 2003 and 2007 — the offending products — by October 10 or completely remove the infringing XML editing capabilities.

The judge also awarded a total of $290 million in penalties, fines, and interest to i4i.

However, last week, the appeals court ruled that Microsoft can continue selling Word and stayed the lower court judge’s permanent injunction.

Microsoft’s two largest PC OEMs, Dell and HP, also had filed friend-of-the-court briefs with the appeals court, arguing that the injunction would severely impact their businesses if they had to make such a sudden change in their product lines.

Next week, on September 14, Microsoft is scheduled to file its response to i4i’s filing. That will be the final filing prior to a hearing before the U.S. Court of Appeals for the Federal Circuit on September 23.

“We’re looking forward to the hearing on the merits of our appeal,” Kevin Kutz, Microsoft legal spokesperson, said in an e-mail to InternetNews.com.

News Around the Web