Technology & Science

Canada's i4i wins patent battle with Microsoft

The U.S. Supreme Court says Microsoft Corp. must pay a $290-million patent infringement judgment awarded to a small Toronto software company.
Loudon Owen & Michel Vulpe talk about how they beat Microsoft in a patent case 5:30

Canadian software company i4i Inc. has won its four-year patent battle with tech titan Microsoft Corp. after the U.S. Supreme Court upheld a judgment that i4i be paid $290 million US for patent infringement.

America's highest court on Thursday upheld an earlier ruling that found the world's largest software maker wilfully infringed on a patent in its Microsoft Word software and ordered it to pay $290 million to i4i. Microsoft was also ordered to stop selling versions containing the infringing technology.

Toronto-based i4i sued Microsoft in 2007, saying it owned the technology behind a tool used in Microsoft Word. The technology in question gave Word 2003 and Word 2007 users an improved way to edit XML, which is computer code that tells the program how to interpret and display a document's contents.

Toronto-based i4i sued Microsoft in 2007, saying it owned the technology behind a tool used in Microsoft Word. ((Mark Blinch/Reuters))

The landmark decision has broad implications for the patent world as it essentially upholds the basis for many years of U.S. patent decisions.

"It's one of the most important business cases the U.S. Supreme Court has decided in decades," i4i chairman Louden Owen said. "It's a watershed," he told CBC News.

"The unanimous decision has very clearly confirmed the current state of the law and it has added a great deal of certainty to the business community," he said.

Owen said the funds will be used to expand i4i's business and to ensure its intellectual property rights are maintained. "We'll continue doing what we do, but with deeper pockets," Owen said.

Microsoft wanted the judgment against it erased because it claimed a judge used the wrong standard in instructing the jury that came up with the award.

The software company said a jury should determine a patent's validity by a "preponderance" of the evidence instead of the "clear and convincing" evidence standard instructed by the judge.

The Supreme Court said the "clear and convincing" standard was the correct one.

"It's difficult to build a business while also fighting this," Owen told CBC News. "It's been a real grind."

Justice Sonia Sotomayor, who wrote the court's opinion, said the courts have interpreted the law the same way for 30 years. During this period, Congress has often amended the patent law, she said.

"Not once, so far as we (and Microsoft) are aware, has it even considered a proposal to lower the standard of proof," Sotomayor said.

Microsoft now sells versions of Word that do not contain the technology in question.

During the trial, lawyers for i4i and the Obama administration had argued that there was little point in granting patents to inventors if corporations can simply infringe upon them with impunity.

Several high-powered companies supported Microsoft in its battle against i4i, including Apple, Google and Cisco Systems. But several other large names, including Proctor & Gamble, 3M and General Electric lined up behind i4i.

With files from The Associated Press