Microsoft loses its appeal in $200-million-plus Custom XML patent infringement case

Microsoft is going to have to cease providing Custom XML as part of its Office suite, as it has lost its appeal to overturn a patent-infringement verdict awarded to Toronto-based i4i for that technology.

The plaintiffs were seeking $200 million for patent infringement. The Federal Circuit Court of Appeals is awarding i4i more than $290 million, plus an added $40 million for intentional infringement, according to a Bloomberg report about the December 22 court verdict. Microsoft has until January 11 to remove the cease selling copies of Office which include Custom XML functionality -- a date which is five months after the original late August 2009 ruling date, the Bloomberg report said.

According to what I had heard previously, Microsoft already has figured a way to disable the Custom XML feature and could address the court order via a release of a Word 2007 version with a patch that will disable that functionality. I'd assume the same fix will be applied to Office 2010 between now and its final release by June 2010. See Microsoft response below: Officials say Custom XML isn't in the Office 2010 beta and that they only have to remove the offending technology from copies of Word 2007 and Office 2007 that are sold on or after January 11.

According to Microsoft, Custom XML is the support for custom-defined schemas. It enables integration of documents with business processes and business data.

I've asked Microsoft for further information about what the company is planning, as a result of today's ruling. I'll add an update to this post once I hear back.

Update 1: Here's Microsoft's official response regarding today's loss of its appeal from spokesperson Kevin Kutz:

"This injunction applies only to copies of Microsoft Word 2007 and Microsoft Office 2007 sold in the U.S. on or after the injunction date of January 11, 2010.  Copies of these products sold before this date are not affected.

"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.   Therefore, we expect to have copies of Microsoft Word 2007 and Office 2007, with this feature removed, available for U.S. sale and distribution by the injunction date.  In addition, the beta versions of Microsoft Word 2010 and Microsoft Office 2010, which are available now for downloading, do not contain the technology covered by the injunction.

"While we are moving quickly to address the injunction issue, we are also considering our legal options, which could include a request for a rehearing by the Federal Circuit Court of Appeals en banc or a request for a writ of certiorari from the U.S. Supreme Court. "