Canadian company i4i's latest legal victory against software giant Microsoft Corp. (NASDAQ:MSFT) is being heralded by the company's top executives as a "war cry for talented inventors" and a likely springboard for growth.
In a decision Tuesday, the U.S. Court of Appeals for the Federal Circuit upheld a US$290-million judgment against Microsoft in a patent-infringement case.
The ruling also includes an injunction, set to go into effect Jan. 11, that will prevent the sale of some versions of the popular Microsoft Word word processing software.
I4i founder Michel Vulpe called the decision "an important step in protecting the property rights of small inventors."
Loudon Owen, i4i's chairman and managing partner of MacLean Waston Capital Inc., i4i's largest shareholder, saw the decision as "vindication for i4i and a war cry for talented inventors whose patents are infringed."
"The same guts and integrity that are needed to invent and go against the herd, are at the heart of success in patent litigation against a behemoth like Microsoft," he said.
"It's what we expected because right from the outset this is the remedy and what we've sought in the case," Owen added in an interview.
"We believe the trial judge made the right decision; we believe the federal circuit court of appeals made the right decision and its now its not an end for us, its a beginning," Owen added.
"It's a platform for us to build our company even larger and faster so it's a tremendously exciting day for i4i."
The latest ruling was on an appeal Microsoft launched of a verdict by a Texas jury that found that i4i patents were infringed upon by the way Word 2003 and Word 2007 customize XML, or extensible markup language, which used in encoding and displaying information.
The injunction prevents Microsoft from selling Word products that have the capability of opening an XML file containing custom XML.
Kevin Kutz, Microsoft's director of public affairs, said the software company is "moving quickly to comply with the injunction."
The court order will apply only to copies of Microsoft Word 2007 and Microsoft Office 2007 sold in the United States on or after the injunction date of Jan. 11, 2010.
"Copies of these products sold before this date are not affected," Kutz added.
"With respect to Microsoft Word 2007 and Microsoft Office 2007, we have been preparing for this possibility since the District Court issued its injunction in August 2009 and have put the wheels in motion to remove this little-used feature from these products," he said.
Microsoft said it expected to have copies of Microsoft Word 2007 and Office 2007 with the feature removed available for sale by the injunction date and added that beta versions of Microsoft Word 2010 and Microsoft Office 2010 do not contain the technology covered by the injunction.
I4i technology fixes "one of the world's big problems," managing and co-ordinating mountains of data, Owen said.
"These are the largest enterprises and the largest governmental organizations in the world that are using this technology to manage their data."
Owen refused to disclose annual sales figures for privately held i4i.
"But the one thing I'll say is we fully expect there is going to be a onslaught of business," he said. "We don't talk about the size of the company today but I can wager a pretty good bet that we're going to be a lot bigger soon."
As for a possible further Microsoft appeal, possibly to the U.S. Supreme Court, Owen said i4i will have to wait and see.
"It's not a right that the Supreme Court will hear it — it will have to be a case that merits their attention and has important elements of law,' he said.
Meanwhile, i4i will be very "vigorously and very positively asserting its rights to this invention should it appear in any products in the Microsoft family of products," he said.