Productivity software

Microsoft's Best Option in Lawsuit: License

Thinking about a new Word or Office rollout but nervous about a recent Texas federal court judgment ordering Microsoft to stop selling its popular software tool?

Don't panic yet, because Toronto firm i4i could still be open to a licensing agreement with Microsoft.

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On Tuesday, a Texas federal court ordered Microsoft to stop selling Microsoft Word and any editions of Microsoft Office containing Microsoft Word pending a final decision on an ongoing patent challenge launched by Toronto-based tech company i4i. Last month, a jury ordered Microsoft to pay the Toronto software company more than US$200 million for patent infringement involving several of its software products. The Toronto firm, which creates collaborative authoring and document management software and specializes in XML -based content development, contends that Word infringes on i4i's earlier patents.

But Michel Vulpe, founder of i4i, said he would welcome a proposal from Microsoft to license his company's technology.

"i4i is not for sale at the moment, although everything has a price. We're more interested in a licensing proposal if one were to come out of this," Vulpe said. So far he has not received any offers from Microsoft, according to the i4i founder.

The option, however, was open to the Redmond, Wash-based software maker since about nine years ago, Vulpe said.

Vulpe said Microsoft representatives went to i4i's office in Toronto sometime in 2000 and were aware that i4i held patents to the XML tagging technology.

"They had three choice: License the technology; buy our company or steal the technology. They chose Option 3," Vulpe said.

Case isn't Over

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But Tim Hickernell, lead analyst for Info-Tech Research Group in London, Ont, says patent documents presented as evidence by i4i are unlikely to standup to a vigorous counter-challenge from Microsoft. "I've read the patent and diagrams presented by i4i and they appear to be very broad and vague," Hickernell said.

"For companies contemplating a Microsoft Word purchase or Office rollout, my advice would be not to put a hold on procurement solely because of this issue," he added.

The documents were simple flow charts describing methods for separating documents from document structures. Hickernell said patent does not describe a unique technology.

i4i's patent "could be applied to any content application from almost any software vendor," according to the 25-year document content expert.

Although he maintains it highly unlikely, the Info-Tech analyst said if i4i ultimately wins, companies such as Adobe, Xerox, Google, Corel and OpenText should take notice, because they might find themselves in the Toronto company's crosshairs next.

Vulpe, founder of i4i, said people who think his company's patent will not stand up to further challenges "do not understand the patent process."

"The court clearly defined what a patent is and Microsoft agreed with the court decision," he said.

Vulpe also clarified that his company is not out to shut down Microsoft Word.

"The court didn't order Microsoft to stop selling Word. The order was to stop distributing custom XML capability in Word, which currently could be found in Word 2003, 2007 and the upcoming 2010 version," Vulpe said.

"If you're using Word without custom XML capability, you're OK," he added.

Hickernell also raised questions about i4i's decision to file its suit against Microsoft in the U.S. District Court for the Eastern District of Texas. "East Texas is not exactly known for its tech industry a more appropriate choice would have been Austin, Texas, or San Jose, California, where judges are more accustomed to tech issues."

For instance, Hickernell said, the East Texas judge might have been unclear about current XML patent issues. "XML is an open standard it is not controlled by Microsoft," the analyst said. Hickernell would not speculate on i4i's motive for the patent suit against Microsoft but said he has never heard of the company until it pursued the Redmond, Wash-based software maker.

i4i's History

Among i4i's list of clients are well-known pharmaceutical companies such as Bayer, Bausch and Lamb Pharmaceuticals Inc, GenPharm Inc. Merc & Co. Inc., and Sandoz.

The company was founded by Vulpe, a Montreal-born inventor whose clients include U.S. Marine Corp, the State of Ohio and the National Aeronautics and Space Administration.

In 1994, Vulpe and Stephen Owens developed a solution that enabled people to use regular word processors as XML /SGML editors.

The patent claimed by i4i describes a method for deconstructing actual document content from the document structure. Although it is not unique, Hickernell said it, the technology is vital for any company that deals with documents.

"It allows developers to adjust and reassemble content for search and indexing purposes and so it is important for anything from simple mail merge purposes to databases to search engine queries," Hickernell explained.

i4i originally filed the case in March 2007, claiming Microsoft willfully infringed on patented technology in Microsoft Office Word 2003, Word 2007, .NET Framework and Windows Vista software. i4i was issued the patent -- U.S. Patent No. 5,787,499 -- in 1998.

The technology that the court said infringes on the i4i patent enables custom XML tagging in Word 2003 and Word 2007, used mainly for creating and modifying templates for Word documents.

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