Microsoft Gets OK to Keep Selling Word

Microsoft Word and Patents

Microsoft won a small but important victory late Thursday, when a federal appeals court stayed a permanent injunction that a lower court issued last month.

The injunction, which had been set to kick in Oct. 10, would have banned Microsoft (NASDAQ: MSFT) from selling versions of Word that a lower court had previously ruled infringed on a pre-existing patent.

That 11-year-old patent, held by Toronto-based developer i4i, covers a specific usage of what’s known as eXtensible Markup Language, or XML.

In its patent infringement case, i4i claimed that XML technology used in Word file formats violates its patent on such “custom” uses of XML. Microsoft argued that i4i’s patent is invalid — but a lower court jury disagreed in May.

The jury granted i4i $200 million for the infringement, and the federal judge in August tacked on fines, penalties, and interest, and enjoined Microsoft from selling the offending Word versions — Word 2003 and 2007.

In mid-August, Microsoft filed a request for an emergency appeal of both the ruling and the injunction, claiming it would cause the company undue hardship.

In a terse, three-page order issued Thursday, the U.S. Court of Appeals for the Federal Circuit agreed to stay the permanent injunction on sales of offending versions of Word pending the resolution of Microsoft’s appeals.

“The court determines based upon the motion papers submitted that Microsoft has met its burden to obtain a stay of the injunction,” the appeals ruling said.

Whether friend-of-the-court briefs filed last week by Dell and HP in support of Microsoft played any role in the appeals court judges’ decision is unknown. Both companies sell Microsoft Office, which includes Word, with some of their products.

The two PC makers claimed that an injunction banning sales of an unmodified Word would severely impact their sales at a crucial time of year, when the holiday shopping period is about to kick in. They also said it would impose an added expense of having to test and install any non-infringing replacement version of Word on their hardware.

The next important date in the process is a hearing on Microsoft’s appeal currently slated for Sept. 23. The company is already gearing up.

“We are happy with the result and look forward to presenting our arguments on the main issues,” Kevin Kutz, a Microsoft spokesperson said in an e-mail to

Meanwhile, i4i officials said they are undeterred by this week’s stay.

“Microsoft’s scare tactics about the consequences of the injunction cannot shield it from the imminent review of the case by the Federal Circuit Court of Appeals on the Sept. 23 appeal,” i4i Chairman Loudon Owen said in an e-mail to “I4i is confident that the Final Judgment in favor of i4i, which included a finding of willful patent infringement by Microsoft and an injunction against Microsoft Word, was the correct decision and that i4i will prevail on the appeal.”

“To paraphrase the great heavyweight boxing champion Joe Louis, ‘They can run, but they can’t hide.’ Microsoft’s time will eventually run out,” he said.

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