Judge Stays Microsoft Word Ban

Microsoft (NSDQ: MSFT) can continue to sell its Word document processing application until an appellate court hears the company's appeal of an earlier ruling that found the product violates the patent of a Canadian software maker.

The U.S. Court of Appeals in Washington, D.C. on Wednesday effectively stayed a lower court's ban on Word sales that would be effective in mid-October if upheld. Microsoft's appeal is slated for Sept. 23.
Microsoft Office, which includes Word, accounted for more than $3 billion in worldwide sales in Microsoft's most recent fiscal year and is used by literally millions of businesses and consumers for everyday tasks like word processing and creating spreadsheets and presentations.

Judge Leonard Davis, of U.S. District Court for Eastern Texas, ruled in August that Microsoft "unlawfully infringed" on a patent that describes how programs go about "manipulating a document's content and architecture separately." The patent, No. 5,787,449, is held by Toronto-based i4i, Inc. i4i develops "collaborative content solutions," according to its Web site.

i4i originally sued Microsoft for patent infringement in 2007.

Davis ordered Microsoft to pay $240 million in damages to i4i, plus court costs and interest. More significantly, he enjoined Microsoft from continuing to sell Microsoft Word, in its current form, in the U.S.

Specifically, Davis said Microsoft can't sell versions of Word that can open documents saved in the .XML, .DOCX, or .DOCM formats that contain custom XML. Those formats were at the heart of the patent dispute. .DOCX is the default format for the most current version of Word, which is included in Microsoft Office 2007. Custom XML is used by businesses to link their corporate data to Word documents.

Davis also prohibited Microsoft from providing technical support for infringing products sold after the injunction takes effect, or from "testing, demonstrating, or marketing the ability of the infringing and future Word products to open an XML file containing custom XML."

Davis said the injunction does not apply to versions of Word that open an XML file as plain text or which apply a transform that removes all custom XML elements—possibly paving the way for Microsoft to issue a patch that rectifies the problem.

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