22 Jan 2010

MS Word violates Canadian patent: US Court of Appeal for Federal Circuit

The United States Court of Appeal for Federal Circuit in a recent decision has affirmed the findings of the United States District Court for the Eastern District of Texas and the award of damages of more than 200 million US$ in favour of a Canadian firm 'i4i' against Microsoft holding that MS Word violates the patent of i4i. The case, relating to the use of XML in the Word program, was dismissed in appeal by Microsoft on all counts and the Appellate Court also upheld the injunction given against Microsoft to soft selling infringing copies of Word anymore. 

The Court also agreed that "in this case, the district court properly considered strong circumstantial evidence that Microsoft’s infringement rendered i4i’s product obsolete for much of the custom XML market, causing i4i to lose market share and change its business strategy to survive. i4i was not required to prove that its specific customers stopped using i4i’s products because they switched to the infringing Word products" and also that "it was not an abuse of discretion for the district court to conclude that monetary damages would be inadequate. In this case, a small company was practicing its patent, only to suffer a loss of market share, brand recognition, and customer goodwill as the result of the defendant’s infringing acts. Such losses may frequently defy attempts at valuation, particularly when the infringing acts significantly change the relevant market, as occurred here. The district court found that Microsoft captured 80% of the custom XML market with its infringing Word products, forcing i4i to change its business strategy. The loss associated with these effects is particularly difficult to quantify. Difficulty in estimating monetary damages is evidence that remedies at law are inadequate."

Have a look at the decision of the United States Court of Appeal for Federal Circuit.

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