The U.S. Supreme Court has agreed to hear Microsoft’s appeal in its patent battle with Toronto-based i4i, which has already caused the Redmond software giant to alter its top-earning Microsoft Office application suite and may cost it over $300 million in penalties. Microsoft’s appeal to the Supreme Court argues that the federal appeals court—where Microsoft already lost—makes it too difficult for parties accused of patent infringement to argue that the patents in question never should have been issued in the first place. And Microsoft has some allies on its side, with long-time rivals like Apple and Google filing briefs in support of Microsoft’s case.
Back in 2009, Microsoft was ordered to stop selling Microsoft Word and pay some $200 million in damages to i4i because it included technology covered by an i4i patent on managing custom XML templates. Microsoft appealed, but ultimately removed the functionality from Microsoft Word rather than stop selling Office. Microsoft pressed on with the case; however, the company has consistently failed to win appeals, with appeals courts finding that there is significant evidence that Microsoft knew about i4i’s patent and went ahead and built the functionality into Microsoft Office anyway. Microsoft has maintained that its technology does not infringe on i4i’s patent, and also claims that i4i’s patent is invalid.
The i4i ruling against Microsoft remains the largest ever upheld by an appeals court on a patent case. The original $200 million damages ruling was later increased due to misconduct by Microsoft’s trial lawyer. With interest, the award would today stands near $300 million
In turning down Microsoft’s appeal, the U.S. Court of Appeals for the Federal Circuit in Washington found that Microsoft failed to offer “clear and convincing evidence” that i4i’s patent was based on technology that was already in use in the marketplace. Without that evidence, the court presumes that patents granted by the U.S. Patent and Trademark Office are valid.
In its appeal to the Supreme Court, Microsoft argues that standard of evidence is too high, and argues that a jury should be able to consider a less exacting standard when presented with evidence that was not considered by the patent office. Microsoft argued that i4i included its technology in a product sold to clients over a year before it applied for a patent, making the technology ineligible for patent protection.
Microsoft’s position has support from a number of major technology companies and trade associations, including giants like Apple and Google (as well as major players in financial services and wireless), who claim their industries are being saddled with burdensome litigation based on questionable technology and software patents.
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