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

“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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