The United States Court of Appeals for the Federal Circuit
released its decision in Microsoft's appeal against
Toronto-based i4i Limited Partnership. The Court of Appeals upheld
the lower court's finding of infringement, the injunction
order, and the $240-million US damage award that Microsoft must pay
i4i. Microsoft will also have to cease shipping MS Word with the
custom XML editor, which was found to infringe i4i's XML
Back in August 2009, a jury in the Eastern District of Texas
found that the 2003 and 2007 editions of Microsoft Word contained
XML editing tools that infringed upon i4i's patent on custom
XML editing software. The jury further found that Microsoft had
wilfully infringed the technology. It awarded i4i $200 million US
in damages. The judge allowed the jury verdict, granted i4i's
motion for a permanent injunction and awarded an additional $40
million US for enhanced damages, together with post-verdict damages
and interest (bringing the total to $290 million US).
The Court of Appeals upheld all of the District Court's
findings, only varying the effective date of the injunction. The
District Court ordered Microsoft to comply with the permanent
injunction within 60 days. As that date had already passed by the
time the Court of Appeals rendered its decision, the Court of
Appeals changed the effective date to five months from the date of
the District Court's ruling (i.e., January 11, 2010).
Microsoft does not have to back-fix its already-distributed
software; it only needs to ensure that software sold after that
date has removed the infringing features. Microsoft has also made
available a patch through its OEM Partner Centre that removes
custom XML functionality from the Word software, noting that the
patch is required for US customers.
Microsoft has requested that a full panel of the federal appeals
court rehear the case.
McCarthy Tétrault Notes:
According to Microsoft's petition for a rehearing, the
$290-million US award represents the largest patent infringement
judgment ever to be affirmed on appeal in the US.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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