Microsoft Says Word Ban Threatens Industry
Microsoft late Tuesday warned of "massive disruptions" to sales of Office, as well as to partners such as Best Buy, Dell, and Hewlett-Packard, if the injunction that prevents it from selling Word 2003 and Word 2007 in the U.S. after Oct. 10 is not set aside.
In an emergency motion filed with the U.S. Court of Appeals, Microsoft asked that the injunction imposed last week by U.S. District Court Judge Leonard Davis be stayed, or temporarily put on hold, while its appeal is heard.
Microsoft's move was expected, as it had previously said it would appeal the verdict and the injunction that resulted from a patent infringement case it lost last May.
"Microsoft and its distributors (which include retailers such as Best Buy and OEMs such as HP and Dell) face the imminent possibility of a massive disruption in their sales," Microsoft argued in the motion. "If left undisturbed, the district court's injunction will inflict irreparable harm on Microsoft by potentially keeping the centerpiece of its product line out of the market for months," the firm's lawyers added. "The injunction would block not only the distribution of Word, but also of the entire Office suite, which contains Word and other popular programs."
The patent infringement case brought by Toronto-based i4i in 2007 resulted in a $290 million judgment against Microsoft and an injunction that bars it from selling Word 2003 and Word 2007 after Oct. 10 unless they're altered.
Microsoft also complained to the Court of Appeals that while it has taken steps toward the latter solution, that, too, puts an unfair burden on the company. "Already, Microsoft is expending enormous human and financial capital to make its best effort to comply with the district court's 60-day deadline," stated Microsoft in the motion.
"Even if Microsoft ultimately succeeds on appeal, it will never be able to recoup the funds expended in redesigning and redistributing Word, the sales lost during the period when Word and Office are barred from the market, and the diminished goodwill from Microsoft's many retail and industrial customers," the company said.
Elsewhere, Microsoft painted a bleak picture for users. "Even if the injunction will not affect Microsoft's existing Office customers, consumers and businesses who require new copies of Office and Word would be stranded without an alternative set of software." Microsoft's attorneys also claimed that the situation would be a "major public disruption," and would "have an effect on the public due to the public's undisputed and enormous reliance on those products."
During the trial, Microsoft said it would take five months for it to craft new versions of Word that omitted the offending feature. i4i countered, saying that it could be done much faster than that with a software patch.
Last week, Barry Negrin, a partner with the New York firm Pryor Cashman LLP who has practiced patent and trademark law for 17 years, agreed with i4i, saying that Microsoft should be able to work around the injunction with an "easy technical" fix. "All Microsoft has to do is disable the custom XML feature, which should be pretty easy to do, then give that a different SKU number from what's been sold so it's easy to distinguish the two versions," said Negrin said in an interview on Friday.
In May, a Texas jury awarded i4i $200 million in damages for Microsoft's patent infringement. Davis added another $40 million in "enhanced damages" for Microsoft's "willful infringement," and additional damages and interest that brought the total to $290.6 million.
According to Negrin, although Microsoft has the right to request an appeal, and a postponement of the damages while that appeal works it way through the system -- the latter is almost always granted -- it has no automatic right to a stay of the injunction. "The district court judge already denied a request for a stay," Negrin noted last week.
In fact, Microsoft also filed a separate appeal of the judgment, and with i4i's agreement, will not have to post bond, as is often required, to guarantee that it has the money to pay damages if it loses the appeal.
Working against Microsoft's request for a stay of the injunction is the fact that it was hit with "willful infringement" of the i4i patent, Negrin said. In a 65-page summary opinion, Judge Davis said that Microsoft knew of the patent held by i4i as early as 2001, but nevertheless set out to make the Canadian developer's software "obsolete" by adding a feature to Word.
Microsoft has also asked the Court of Appeals to put its motion on a fast-track schedule. It requested that the court order i4i to respond to the motion by next Monday, Aug. 24, and promised it would file a reply to any i4i response by Aug. 28.