Microsoft has lost its appeal to the U.S. Supreme Court in a long running legal battle against i4i, the small Canadian company that sued them claiming willful infringement of its patents in Word 2003 and 2007. Specifically, the dispute centered on some custom XML tagging features used by the software for encoding and displaying information, which had already cost the Redmond giant a sales injunction on Office last year and now almost $300 million in fines.
The original verdict in 2009 required Microsoft to remove the infringing XML feature from Word and pay a $200 million fine. Soon after losing the initial case Microsoft filed an appeal asking the court to re-think its decision. Nevertheless, a panel of judges upheld the initial ruling in December 2010, and having failed to modify its software in time, one month later Microsoft was forced to remove all versions of Office from its online store.
Following its failed appeal the company was slapped with some extra fines, including a $40 million fine for "willful" infringement, taking the damages up to $290 million. Microsoft promptly removed the incumbent feature from Word in order to keep selling its software and decided to challenge the verdict one more time at the Supreme Court level.
In its defense Microsoft was hoping to challenge patent law itself and introduce a lower standard for challenging patent lawsuits – legal jargon courtesy of ComputerWorld: "Under current practice, an accused infringer must show 'clear and convincing evidence' that the patent in dispute is invalid. But Microsoft had argued that the burden of proof bar should instead be lowered to 'a preponderance of the evidence.'" Companies including Apple, Google, EMC, Cisco Systems and the Electronic Frontier Foundation had all filed documents with the court in support of Microsoft's argument.
The Supreme Court unanimously ruled against Microsoft, though, suggesting that companies such as Microsoft will have to take the issue to Congress if they want to change patent law. The decision is a setback for big tech companies who feel they are often targeted by so-called patent trolls. On the other hand, by requiring extensive proof it also protects small patent holders against big corporations with large legal teams whenever their patents are challenged.