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David and Goliath II: i4i Wins (Again) over Microsoft

Dec 25, 2009, 04:03 (4 Talkback[s])
(Other stories by Andy Updegrove)

"Yesterday a very small company won a very big victory against a very large software vendor. The small company is i4i, a Canadian company that claimed that the large company had not infringed its patent accidentally, but knowingly and willfully, after engaging in discussions relating to the very same technology in question. For the small company, the functionality in question represented its main product, so when the big company bundled the same technology for free in its own product, i4i's business was gutted. If you've been following the story already, you know that the big company is Microsoft.

"Yesterday's big victory was the affirmation by an appellate court of the trial court's finding of willful infringement. Under the ruling on appeal, Microsoft had been required to remove its infringing code within 60 days, and also pay i4i $290 million in damages due to the lost sales and other harm it had caused. Here are my thoughts on what just happened, and what's likely to happen next. First off, as I pointed out in my last blog entry on this subject, there was never any doubt that Microsoft would be able to continue to sell Word, and Office with Word.

"Notwithstanding the very high table stakes of the judgment in August, the Word/Office franchise is worth far more, and Microsoft could settle any day of the week, if it wanted to, simply by making it worth i4i's while to sign a settlement agreement. So the only question between the original decision and now was whether Microsoft would fight or settle, and if its strategy was to fight, whether it would also try and design the infringement out of its products."

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