i4i to keep eye on Microsoft's software for signs of backsliding

Victor in $290M patent infringement case to examine all Microsoft software 'extremely carefully'

The Canadian developer that won a $290 million court judgment against Microsoft will be going over future Microsoft software "extremely carefully" to make sure its patent hasn't been infringed, the chairman of i4i said today.

Although Loudon Owen declined to say whether his company's software engineers had been picking through Office 2010 -- which Microsoft said did not use i4i's Custom XML technology -- he promised that they would be looking at all Microsoft software for evidence of wrongdoing. Microsoft released a public beta of Office 2010 in mid-November.

"We are going to look extremely carefully at all Microsoft products," Loudon said.

Presumably, that also means the revised Word 2007 Microsoft must produce by Jan. 11, 2010 if it wants to continue selling Word, and the lucrative Office 2007 franchise that includes Word.

On Tuesday, a federal court rejected Microsoft's appeal and confirmed the ruling of a lower court that said the software giant owed i4i $290 million in damages and interest for infringing the Toronto-based firm's XML editing technology. Along with the financial judgment, the lower court judge also barred Microsoft from selling versions of Word that include the technology.

The Court of Appeals for the Federal Circuit order on Tuesday set the start of that injunction as Jan. 11, less than three weeks from today.

Microsoft has said it will be ready with a revised, Custom XML-less version of Word 2007 and Office 2007 by that date. Computer makers already have been issued a patch that lets them factory-install a compliant edition of Office on new PCs before they're shipped to customers.

In its only public statement on the appeals ruling, Microsoft downplayed the significance of the move, calling the XML editing function it was stripping from Word a "little-used feature."

Loudon said that was simply short-sighted. "There's a big missing link in Microsoft's [public] statement," he said in a telephone interview today. "That's something called a customer. Microsoft did not address customers [in its statement], but there are a lot of its customers using Custom XML in Word."

That's where i4i comes in, Loudon continued. "We'll be taking lots of calls from customers who want Custom XML," he argued. "We already are. The premise behind i4i is that this is a very, very important functionality, and a huge reason that Microsoft put forward to potential customers to buy the new Office 2003 and Office 2007. And now their patch is removing it."

Although it appears Microsoft is moving forward with a technical fix to the problem -- rather than license i4i's Custom XML technology -- Loudon said that i4i is, even now, willing to talk to its legal rival about a licensing deal. "We're always open to talking to anyone reasonably," said Loudon. "We'll talk with Microsoft if they're reasonable."

It may be a while before i4i sees the nearly $300 million from Microsoft that the appeals court confirmed the Redmond, Wash. developer must pay. According to Loudon, Microsoft is not obligated to settle its account until 15 days after they've exhausted the last possible appeal. Tuesday, Microsoft said it is keeping its legal options open and might request a rehearing by the Court of Appeals, or ask the U.S. Supreme Court to hear the case.

"They owe us quite a bit of money," Loudon noted. "But we want to be the ones to make up our minds about who uses our technology. We're here to build a business. So the next step for us? Go back to work."

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter @gkeizer, send e-mail at gkeizer@ix.netcom.com or subscribe to Gregg's RSS feed .

Copyright © 2009 IDG Communications, Inc.

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