Microsoft, i4i square off in appeals hearing over Word

'No surprises,' says i4i of oral hearing in D.C. today; wants injunction restored

A federal appeals court today heard arguments in a patent infringement case involving Word that required Microsoft to pay nearly US$300 million in damages and barred the company from selling the software starting October 10.

Today's hearing was the latest step in a fast-track appeal that was granted Microsoft earlier this month, when it contested a jury verdict that ruled it illegally used technology patented by Canadian developer i4i.

The case has attracted interest primarily because a lower court slapped an injunction on Microsoft that would have prevented the company from selling Word 2003 and Word 2007 as of October 10. That injunction, however, was suspended earlier this month after Microsoft threatened that chaos would result. According to Microsoft, it would take five months to modify Word, and the company wouldn't be able to sell Word and the suites, Office 2003 and Office 2007, that include the popular word processor, during that time.

Lawyers for Canadian developer i4i and Microsoft were each given 30 minutes today to argue their positions before the three judges who make up the US Court of Appeals for the Federal District.

Although the judges did not rule today -- and gave no indication when they would -- i4i and Microsoft representatives naturally had their own takes on what occurred.

"We really do feel very good coming out of the hearing," said Loudon Owen, the chairman of i4i, in a telephone interview after the hearing.

"We have the verdict and the injunction, so the onus is on Microsoft. What was good was that there were no surprises.

"It was very encouraging, because Microsoft just rehashed its arguments," added Owen.

In a statement e-mailed to Computerworld , Microsoft spokesman Kevin Kutz had a different outlook. "We emphasised three points for why a reverse judgment or retrial is warranted," said Kutz. "Courts need to construct claims properly, the patent is not valid and we do not infringe it, and common sense can't be abandoned when it comes to damages calculation."

Like Owen, Kutz also commended the judges. "We are pleased with how the hearing proceeded, and we look forward to the Court's ruling," he said.

Owen continued to hold out hope that the injunction would be restored , perhaps to its original October 10 date.

"We're not in a position to tell the judges their business," he said when asked whether i4i's lawyer prompted the panel to quickly produce a ruling on the appeal. "But there was a fairly extensive discussion of the time frame, including the fact that the actual verdict was [rendered] in May, and that Microsoft has had four-to-five months to decommission [Word]."

The injunction required Microsoft to either stop selling Word 2003 and 2007, or to modify the software so that it no longer includes the infringing XML editing and "custom" XML technology patented by i4i.

"We are being irreparably harmed [by the injunction's stay]," said Owen today. "Until it's put in place, we are suffering not only tactical damage, but strategic damage."