Microsoft's i4i Appeal Hits the Supreme Court

Microsoft and i4i faced off in court for the umpteenth time on Monday. But this time the stakes were higher than ever, and the outcome will be cast in stone: This week's appearance was before the US Supreme Court. And whatever decision the Court ultimately renders will be final.

At issue is a four-year-old patent-infringement lawsuit which, to date, has been ruled in i4i's favor. i4i first sued Microsoft in March 2007, alleging that the software giant's Word software "willfully infringed" on an i4i patent for XML document encoding and customization. The company had originally filed for its patent in June 1994, and it was awarded to i4i in 1998.

The patent-infringement suit has had a number of ups and downs. In August 2009, a US federal court issued an injunction against Microsoft, preventing it from shipping the infringing technologies in Word 2003 and 2007 (the then-current versions of the product). Microsoft filed for an emergency stay and was later granted its request. But a December 2009 court of appeals ruling affirmed the original ruling and found that Microsoft did infringe on i4i's patent. Microsoft has since pulled the offending technology from Word.

i4i had been awarded over $200 million by a jury in the original case, but the judge also added another $40 million for trial misconduct (its lawyers made arguments that were "persistent, legally improper, and in direct violation of the Court's instructions").

After the US Patent and Trademark Office affirmed the validity of i4i's patent in 2010, Microsoft petitioned the US Supreme Court to hear the case. The Court agreed in November and will test Microsoft's claims that the i4i patent is invalid because of "clear and convincing evidence" of prior art—a claim that, if withheld, would result in the revocation of the patent.

Lawyers for both Microsoft and i4i presented their cases on Monday, with Microsoft arguing that i4i overly benefited from a vaguely and poorly worded patent. And it has some interesting supporters: A coalition of 18 companies—including Google, The New York Times, Red Hat Linux, and Wal-Mart—are supporting Microsoft's stance officially, as are the Electronic Frontier Foundation and the Apache Software Foundation.

Chief Justice Roberts has recused himself from the case because he owns a large amount of Microsoft stock. But the Court is expected to issue its ruling in June.

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