A Texan federal jury has banned Microsoft from selling its ubiquitous wordprocessor Word in the United States after it was accused of violating patents belonging to Canadian firm i4i Ltd.
The dispute centres on a patent granted in 1998 to i4i for aspects of the XML format. i4i alleged in 2007 that Microsoft violated the patent in Word 2003 and Word 2007, which both contained XML editing capabilities.
Microsoft contended that the patent was invalid and was not infringed. However, the court ruled in i4i’s favour, and Microsoft was ordered to stop selling Word within 60 days.
In May this year, i4i was also awarded $200 million in damages for ‘lost royalties’, the fourth-largest recorded jury verdict in the US and the equivalent of $98 for every copy of Word sold.
Last Tuesday the company was ordered to pay an additional $37 million in prejudgement interest and a further $40 million for ‘wilful infringement’, and to cease selling or importing any Word files capable of opening XML files.
Microsoft will appeal, but the decision is likely to cause some sleepless nights at the software giant – in its last quarter, 60% of the company’s operating income came from its business division, which in turn mostly sells Office, of which Word is a key component.
Given its size and relevance to the public sector, Word’s injunction could also be forcibly lifted by the US government as occurred with RIM in February 2006 when the BlackBerry-maker was ordered to shut down its network in a dispute with patent-holding company NTP.