Supreme Court rules against Microsoft's attempt to alter patent-infringement rules

By | June 9, 2011, 7:58am PDT

The U.S. Supreme Court has rejected an appeal by Microsoft to change the ground rules over how patent infringement is determined.

On June 9, the Supreme Court upheld the nearly $300 million verdict in favor of Toronto-based i4i against Microsoft. The justices were unanimous in their decision, according to a Reuters report.

Here’s a copy of the Court’s verdict against Microsoft (PDF).

Microsoft was attempting to get the court to change what constitutes the proper legal standard for determining a patent’s validity. Microsoft and a number of companies backing its play — including Apple, Google, Intel, Verizon, a number of auto makers, drug companies and financial services companies — were in favor of the Court to make it easier for companies facing infringement suits to prove a patent is invalid.

The Supreme Court agreed in November 2010 to hear the case. News.com reported in April of this year on the arguments in court and provided a transcript of the Supreme Court hearing.

i4i Inc. sued Microsoft for infringement over a patent for custom XML. i4i won the case in the summer of 2009. In December 2009, Microsoft lost its appeal of the case, heard by an East Texas District Court, and was ordered to pay i4i more than $290 million and remove the custom XML technology from certain versions of Microsoft Word.

Microsoft officials said they’d have a statement on today’s loss coming soon. Update: And here it is from a company spokesperson:

“This case raised an important issue of law which the Supreme Court itself had questioned in an earlier decision and which we believed needed resolution.  While the outcome is not what we had hoped for, we will continue to advocate for changes to the law that will prevent abuse of the patent system and protect inventors who hold patents representing true innovation.“

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Mary Jo has covered the tech industry for more than 25 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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Freelance journalist/blogger Mary Jo Foley has nothing to disclose. WYSIWYG (what you see is what you get). I do not own Microsoft stock or stock in any of its partners or competitors. I have no business ventures that are sponsored by/funded by Microsoft or any of its partners or competitors.

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Mary-Jo Foley

Mary Jo Foley has covered the tech industry for 25 years for a variety of publications, including ZDNet, eWeek and Baseline. She has kept close tabs on Microsoft strategy, products and technologies for the past 10 years. In the late 1990s, she penned the award-winning "At The Evil Empire" column for ZDNet, and more recently the Microsoft Watch blog for Ziff Davis.

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RE: Supreme Court rules against Microsoft's attempt to alter patent-infringement rules
dsfwrryd88-24353648351994798997222005474665 10th Nov
kkvrlc,good post!
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While I hate Microsoft
itguy08 9th Jun
I think they should have won his suit. The patent system needs reform very badly.
@itguy08
Your statement should read "very bad", not "very badly", there is a grammatical difference. Maybe you should have stopped at "The patent system needs reform" perhaps. To that we all agree.
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Hmmmm....are you sure?
FeralUrchin Updated - 9th Jun
@RicD_ As I see it, in the above sentence "needs" is used as a verb. How or how much something "needs" would be an adverb, so I think "badly" is correct after all. Try changing the word order. Would you say "The patent system bad needs reform" or "The patent system badly needs reform"?

But hey, exchanges like this demonstrate that the ZDNet talkbacks sometimes serve as a kind of goofball social networking tool rather than as a way to exchange real information.
  • Flagged
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I agree, BUT
Economister 9th Jun
@FeralUrchin

maybe correct English would be: The BAD patent system needs reform. wink
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@FeralUrchin
I understand your comment. My thought is the OP was using 'badly' the same as when someone says "I feel badly". That means it is physical thing, maybe with their hands, not their emotions. So, I read the OP using 'badly' in the incorrect context. Thus, when one feels badly it is a physical thing they cannot do well.

@Economister
You may be most correct of us all.

Thank you both for your comments.
  • Flagged
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ZDNet: Fix you damned comment system
DeusXMachina 10th Jun
@RicD_

"... the same as when someone says "I feel badly". That means it is physical thing, maybe with their hands, not their emotions."

FYI, that is not the distinction here. In "I feel badly," "feel" is operating as a copula, and therefore can NOT have an adverb. Similarly, the proper answer to "How are you doing?" is "I'm doing good," or some such.
FTR, the OP was correct.
  • Flagged
@RicD_ I love it when a grammar nazi uses poor diction while correcting someone else!

"Maybe you should have stopped at "The patent system needs reform" perhaps" is redundant and improper.

One should not start a sentence with "maybe", then end it with "perhaps"... they mean exactly the same thing.

Checkmate!
@itguy08,

Funny, this wouldn't be the first time I disagree with you. However, it would be the first time we switch sides on an issue. I do agree the patent system needs reform. However, the custom XML patent violation, in my opinion, isn't one of those frivilous lawsuits. i4i had created an add in to Word that allowed you to create custom XML documents that would allow you to integrate your business processes. To protect their revenues from Microsoft, they went to the patent office and was granted a patent for an idea that was unique at the time. Microsoft created the same functionality in Word and it was released in Office 2007 as a base feature (i.e. for free). This violated i4i' patent and caused considerable harm to their business. Microsoft should just pay the settlement and leave it alone.
@bmonsterman
You can't have it both ways?? Either patents are friviously or they are not. It has been my opinion that the holder of the patent should be given lattitude, since they created the thing patented. But some linux people ssaid that should not be so, because it gives microsoft too much lattitude. Which is it???
@bmonsterman Can you explain what is original about what i4i did? Everybody was getting into XML for just about everything back in the early 2000's.

Is the i4i idea something that another company or person would have not come have been able to come up with in a timely manner? Would i4i not have bothered to create their idea if they could not patent it?

I'm very skeptical of software patents because good software is going to be created whether or not a patent system exists. Instead, what we're currently stuck with is a patent minefield that keeps companies and people from developing new ideas for fear of infringement.
@windozefreak,
"You can't have it both ways?? Either patents are friviously or they are not."

Nonsense. There is definitely a difference between someone who thinks of something, runs down to the patent office and patents it...and then wait to sue someone, and someone who actually creates the product, markets, sells and builds their business around it.
@K B,
I thought I did. This patent doesn't simply cover the use of XML in work documents...that would be stupid. It's the ability to create custom xml schemas in Word (via a plug-in) which allows you to integrate your work documents into a i4i's collaboration suite of products. When Microsoft released the new version of word, not only did it cannabalize their business, it also automatically removed the custom xml extensions when ever documents that used the plugins were opened. This caused loss of data for their customers. Don't get me wrong. I'm a fan of Microsoft. But when they're wrong, they're wrong.
@itguy08
...the fake patent/copyright attack against Linux?
Small world!
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Except they didn't
WilErz 9th Jun
@ kd5auq

Microsoft bought a Unix licence from Sco. So did Sun Microsystems, amongst others. Microsoft later recommended Sco to a private equity firm called BayStar, who, along with Royal Bank of Canada, ended up investing in Sco. The money that BayStar and RBC invested, however, was their own, not Microsoft's.

BayStar and RBC apparently thought Sco had a case, and they certainly weren't alone in that. What killed Sco's case was the fact that, contrary to their claims, they didn't actually own the Unix source code copyrights (or the Unix patents), so it was all rubbish from start to finish. That only came out later, however, and if BayStar/RBC had known it at the time, it's unlikely they'd have invested in Sco in the first place.

Obviously both Microsoft and Sun had ulterior motives in agreeing to buy Unix licences from Sco, and both would have benefited if Sco's claims had been valid. That may even be why they agreed to buy Unix licences from Sco (instead of fighting, as IBM did). In any case, the matter has been investigated, and it's clear that Caldera/Sco were acting on their own, and weren't puppets of Microsoft (or Sun). There was no conspiracy (except in the minds of the aluminium foil deflector beanie brigade).
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WilErz: MS and SCO
John L. Ries 11th Jun
But there are also the long standing allegations made by MS itself (including in Steve Ballmer's public speeches) that Linux violates undisclosed patents held by MS. MS management may or may not have had anything to do with the SCO litigation (I think they covertly supported it, but it was ultimately Darl McBride's show), but their own public statements demonstrate that they regard the strategy as a legitimate one, and it should be noted that MS did not initiate it's own "intellectual property" campaign until after SCO's efforts were seen to be hopeless.

BTW: I've never worn a tinfoil hat.
I agree. It's too bad Google or Apple weren't arguing this. No one likes Microsoft. I'm sure even supreme court justices aren't immune to this vibe.
@itguy08
What do you expect from political appointees who never can be fired.
@rparker009
Amen to that!!!
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At least if they were elected...
John L. Ries 11th Jun
@rparker009
...they might be persuaded to do favors for large campaign contributors.
@rparker009

What do you expect from political appointees who never can be fired.

Agreed. This would have turned out very different if justice could have been bought like legislation is.


happy
@itguy08 ... Agreed; actually, where code is involved, I'm not so sure a complete bulldozing and re-implementation is in order of the spaghett'd mess of rules in place today. My biggest problem is the number of people ignorant of the situaton are making decisons that affect outcomes of something they know little about. Can you imagine what would happen if any of them got hold of the GPU and tried to adjudcate it?
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Message has been deleted.
Linux Geek Updated - 9th Jun
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Virtually every software developer ...
P. Douglas Updated - 9th Jun
@Linux Geek,

... is guilty of patent infringement, because it is impossible to write a program without infringing on several. Software is a system of myriad inventions - much more so than other technologies - and it makes about as much sense to patent software as it does to patent literature or music. Software has copyright and other IP protections, and patents are nothing but superfluous constructs, that threaten the viability of software industry.
@P. Douglas
just use OSS and get an OIN membership to avoid patent lawsuits.
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Message has been deleted.
Michael Alan Goff Updated - 10th Jun
  • Flagged
@Linux Geek - how, precisely, does publishing the source of a given project/product reduce one's patent infringement liability?
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@Linux Geek

the ones who are in court every day of the week anymore
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Sure
Economister 9th Jun
@Will Pharaoh

MS just picks on all the little guys, whom they think they can outlast and outspend. They know it is cheaper to settle than to fight.

MS has always been and apparently always will be a bully.
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What's your point?
Michael Alan Goff 9th Jun
Do you even have a point Economister?
  • Flagged
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Even simple points escape you?
Economister 9th Jun
@goff256

Maybe if you re-read the original post, the MS mole's response and my rebuttal REALLY SLOWLY, you may get it.
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Yay, an insult
Michael Alan Goff 9th Jun
Still, I don't see how your response even has anything to do with his. The "neener neener neener" crap is just that... crap. I had hoped that you would eventually grow the hell up, but that doesn't seem like it's going to happen.
  • Flagged
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Firms aren't people
WilErz 9th Jun
@ Economister

By your standard, any well-run firm would have to be labelled a 'bully'. Establishing a tough reputation is clearly the optimal strategy for any firm likely to be targeted by legal trolls (over patents or anything else). It makes things harder for genuine victims, but if they ultimately prevail in court (as i4i have done), then the legal system has arguably worked.

Corporations are best viewed as amoral, profit maximising entities, which is why we need legal systems (including competition authorities) to regulate them. Anthropomorphic approaches to corporate behaviour aren't likely to provide much insight.
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@WillErz
"Anthropomorphic approaches to corporate behaviour aren't likely to provide much insight."

This statement is absurd on the face of it. Anthropomorphism is the very basis of corporate law. It is why it exists. It is a legal framework that treats a company of individuals as a single, discrete entity. It is also the basis of recent (errant) Supreme Court decisions granting them freedom of speech.
It is where the "corp" (body) in "corporation" comes from.
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Nonsense
WilErz 10th Jun
@ DeusXMachina

I'm afraid you're quite confused. The law concerns rights, not attributes. Corporations, which embody groups of individuals acting collectively, are given similar rights to the individual members. That doesn't imply that corporations display the same human attributes as the individual members (anthropomorphism): they don't get happy or sad, or like/dislike other corporations, etc. Only individuals acting on behalf of corporations display these human attributes (because they actually are human).

Your etymology is confused/silly too. Do you think referring to the Sun as an 'astronomical body' implies that astronomers assign human attributes to it? 'Corporation' ultimately derives from the Latin 'corporare', which means 'to join into one body', or 'to embody', and the Latin doesn't imply the human body any more than its English counterpart ('corpus', like 'body', has a much broader meaning than that). This 'joining' aspect is also reflected in, for example, the German 'Gesellschaft', which derives from 'gesellen' (to join/associate with someone).
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ZDNet: fix your damned comment system
DeusXMachina Updated - 11th Jun
@ WilErz
It is not nonsense, and I am not confused. Your cursory etymology aside, the FULL definition is:
a company or group of people authorized to act as a single entity (legally a person) and recognized as such in law.

The parenthetical is NOT mine.
Likewise, from the wikipedia entry:
"Despite not being natural persons, corporations are recognized by the law to have rights and responsibilities like natural persons ("people"). Corporations can exercise human rights against real individuals and the state, and they can themselves be responsible for human rights violations."

This is the case, per se. Corporations, in legal terms are what are known as "Separate Legal Entities". I.e., separate individuals from the owner(s). Under United States Law, a Separate Legal Entity or SLE refers to a type of legal entity with detached accountability. As such, a business setup as an SLE is legally separate from the individual owners. If a business is a separate legal entity, it means it has some of the same rights in law as a person.

Sie sind einfach falsch. Per se. Die irrelevant Reise ins Deutsche ungeachtet.
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re: ZDNet: fix your damned comment system
none none Updated - 13th Jun
@DeusXMachina

ZDNet: fix your damned comment system

Don't hold your breath. If ZDNet had any fixing budget it would spend it on its home page before fixing the talkbacks.

From the News & Blogs landing page:
"Is the iCloud the end of the Linux & amp ; Windows desktop?"

& amp?? They look like amateurs and this error has been on the site since the last do-over. How long has that been? I will give them credit, though. They have gotten a lot better at writing headlines that don't expose their sloppy code.





happy
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@Linux Geek A precedent has been set for XML based file formats. If you're a Linux user, it is a fair bet you are using OpenOffice.org or LibreOffice. And it will be only at i4i's good graces if neither is pursued.
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And this coming from MS with all its Linux and related patent shenanigans? I am glad they lost.
@Economister
everyboy is happy except M$!
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@Linux Geek They may be a good deal less happy should i4i go after users of the ODF formats.
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Yeah, why try to reform the patent system
Michael Alan Goff 9th Jun
Microsoft wanted it, it must be horrible.
@goff256 - Actually, EVERYBODY but MS lost on this one:
1) MS lost - and on the facts, they deserved too. What the DID was unconscionable,
2) The software community as a whole lost - by MS losing because of their brazen mis-behavior, but trying to use the correct argument that the patent system is broken, they have effectively destroyed the use of this argument by the defendant in cases where THEY are the aggressor. Legal precedent seems hard to break.

So, for only $300 million they have made the defense by ANYONE else against a case where MS is the patent aggressor significantly harder and far more expensive.

The ramifications of this could be quite significant and chilling.
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Thank you
Economister 9th Jun
@chipbeef

for an insightful post.
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That sounds silly
Michael Alan Goff 9th Jun
i4i shouldn't have won their case.

This won't help anyone, not Microsoft or anyone else. We all lost with this one.
  • Flagged
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Silly?
Economister 9th Jun
@goff256

Somebody posts a serious and informed Talkback, and you call it "silly"?

Maybe you need to take off your MS fan boy hat and think a bit. Maybe MS, due to its own conducts, and due to trying to make this a test case, ended up shooting itself and a whole bunch of other players in BOTH feet, but that is how arrogant MS can be.

Maybe the justices wanted patent reform, but they just could not let it happen in this case due to MS's conduct.
I don't know where to start with this laughable post of yours, Economister. Let's start off with the idea that his post was well thought out. It wasn't. It was a terrible post, with very little logic behind it.

Microsoft lost. They didn't win anything.

But let's look at your insistence that I wave a Microsoft flag. I don't. I'm waiting for my check to get a Asus Transformer, I dual boot Ubuntu, and I'm looking forward to getting a Galaxy S II.

But more importantly, there's the idea that this was based on their "conduct". If that is indeed the case, then they're even bigger idiots than you are. These cases should be determined by more than simply whether or not they liked how Microsoft acted.

Ya know, logic and all that should be most important. But I guess it's not.
  • Flagged
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@chipbeef

So because someone stands up for their rights and lost, everyone now loses on precedent.

So you are outright claiming that no one should satnd up for their rights, because if they lose, then others can not win.

plain
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Actually, it is Microsoft's fault.
Third of Five 14th Jun
@Mister Spock It seems as though i4i stood up for their rights against Microsoft's attempts to weasel out of paying what they owe. The consequence of this is that now Microsoft is indelibly marked as a thief, and that's probably more damaging to them than any dollar amount.
@Economister Buuuutttt....doesn't their loss actually set precedent for their shenanigans against Linux? Seems to me it is a loss for their defense, but on the other hand, it is a win for the suits they filed.
@bigsibling - BINGO!

A chilling development to be sure...
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kkvrlc,good post!

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