MICROSOFT MUST BE PANICKED that its recent loss in a US patent lawsuit could dampen the retail launch of its massively hyped Windows 7 operating system on 22 October.
Last Friday it filed a sealed Emergency Motion asking for a stay of execution following its loss on 11 August in i4i v. Microsoft, a patent infringement lawsuit covering Custom XML.
In that ruling, Judge Leonard Davis of the US District Court for the Eastern District of Texas, Tyler Division, issued both a Final Judgment for monetary damages totaling $290 million and a Permanent Injunction barring Microsoft from selling Microsoft Word 2003 and 2007, and Word for Mac 2008, or any similar versions, as of 10 October and while i4i's Custom XML patent remains in effect.
Microsoft is entitled to a stay pending appeal on the monetary damage award, if it posts an appropriate bond. However, under federal court rules there is no such automatic right to a stay of injunctive relief pending appeal, although courts will sometimes grant such a stay.
Obviously Microsoft will appeal both the judgment and the injunction, but it can't hope to get any sort of decision on appeal before the Windows 7 launch, and likely not for months or even years. It might obtain a ruling on its emergency motion before then, but i4i can be expected to oppose that and Microsoft might not prevail.
It appears Judge Davis was not positively impressed by Microsoft's behaviour in the case.
In his 65-page opinion, the judge said that evidence presented during the trial established that Microsoft knew of i4i's patent on Custom XML since it met with i4i's executives in 2001 and that it willfully infringed the patent in Word 2003 with the intention of burying the company in the marketplace. He wrote, "The trial evidence revealed that Microsoft's intention to move competitors' XML products to obsolescence was quite bold."
Judge Davis also tacked on $40 million in punitive damages, in addition to the jury's award of $200 million, as a sanction for repeated misconduct by Microsoft's lawyers during trial.
One has a hard time imagining that the Vole's attorneys can be looking forward to asking this judge to hold up this injunction until an appellate court can decide if he got it right.
So, how many people do you think are going to be keen to get Windows 7 this Autumn - in the midst of the worst economic times since the Great Depression - if they won't also be able acquire a copy of the full Microsoft Office suite including Word to go along with it?
Given its behaviour, this could not happen to a more thoroughly deserving company. µ
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