Microsoft Must Pay Canadian Firm Millions for Patent Infringement

The largest software company in the world, Microsoft, was recently defeated in an appeal to the US Supreme Court concerning the $290 million in damages that it was ordered to pay to Canadian company i4i in a patent dispute case.

i4i had asserted that a particular version of Microsoft Word infringed a patent they hold on a method for document editing. The Supreme Court ruling sets a precedent for companies that contest patents being used in court actions. Essentially, these companies will still have to give persuasive justification that a patent is void so that it is dismissed.

Microsoft had wanted to undermine the standard of proof required in the case. The original suit dates back to 2007, when i4i complained against Microsoft over a patent regarding XML in documents for Word 2007. Microsoft had refuted these claims, suggesting that the patent was void, although the jury scrapped that rebuttal. Microsoft appealed to the Supreme Court, and the Court’s decision against Microsoft will have effects for all future patent cases.

Unanimously, the Supreme Court concurred with the US appeals court when it found in favor of i4i. The high court disapproved of Microsoft’s suggested lower standard. The lowered standard would supplant the long-held prerequisite for defendants in a patent lawsuit to show that a patent is invalid through convincing and clear evidence. Microsoft’s lower standard of proof would have made it easier to invalidate poorly constructed patents. The large software giant further asserted that the lower standard would encourage more competition and innovation.

In justifying the court’s decision, Justice Sonia Sotomayor of the Supreme Court referred to the fact that when the governing standard of proof is originally determined by Congress, this standard usually prevails. Over the past 28 years, Congress had approved and relied on the standard, and the Supreme Court should thus uphold it, according to the court opinion.