Earlier this year, a judge ruled that Microsoft willfully infringed on an XML-related patent held by i4i, and ordered the company to pay 290 million USD. In addition, if the Redmond giant didn’t comply within 60 days of the ruling, Word would be banned from the US market. Microsoft later received a stay on this injunction, pending appeal. This appeal failed for Microsoft, as the earlier ruling has been upheld.
This means that Microsoft must either alter Word so that it no longer infringes upon i4i’s patent, or it must cease selling Word altogether on the US market after January 11, 2010. Of course, a more likely outcome is that Microsoft will pay the fine, license the patent, and move on. They can place one more appeal, this time to the US Supreme Court.
“A small company was practicing its patent, only to suffer a loss of market share, brand recognition, and customer goodwill as the result of the defendant’s infringing acts,” the judges in the appeals case argue, “The district court found that Microsoft captured 80 percent of the custom XML market with its infringing Word products, forcing i4i to change its business strategy.”
In addition, Engadget explains that i4i is probably not a patent troll. The company is a database company employing 30 people, and shipped one of the first Office XML plugins. It also XMLified the entire USPTO database back in 2000 – no small feat.