Judge Grants Permanent Injunction against Microsoft in Favour of i4i, Damages now $290 million USD

    TORONTO, Aug. 12 /CNW/ - Yesterday, in the U.S. District Court for the
Eastern District of Texas, Tyler Division, the Honorable Leonard Davis issued
a Final Judgment which upheld the verdict won on May 20, 2009, by i4i, a
global technology company headquartered in Toronto, ON, Canada. The Final
Judgment is an award in excess of $290 million and includes a Permanent
Injunction against Microsoft Corporation ("Microsoft") for custom XML in Word
2003 and Word 2007.

    The Final Judgment includes the following:

        (a) Defendant Microsoft is found to have unlawfully infringed U.S.
            Patent No. 5,787,449 (the "'449 patent").
        (b) Microsoft is found to have infringed the '449 patent willfully.
        (c) The '449 Patent is valid and enforceable, and Michel Vulpe is
            found not to have engaged in inequitable conduct with respect to
            the '449 patent.
        (d) i4i LP's and Infrastructures for Information Inc.'s (collectively
            "i4i") damage award is found not barred by laches.
        (e) The Court awards damages to i4i for Microsoft's infringement of
            the '449 patent in the amount of $200,000,000.
        (f) i4i is further awarded enhanced damages of $40,000,000 for
            Microsoft's willful infringement.
        (g) i4i is further awarded post-verdict damages of $144,060 per day
            from May 21, 2009 until the date of this Final Judgment.
        (h) i4i is further awarded pre-judgment interest of $37,097,032 up to
            May 20, 2009 and $21,102 per day thereafter until the date of
            this Final Judgment.
        (i) i4i is entitled to post-judgment interest as provided for by 28
            U.S.C. - 1961 for any time period between the entry of this Final
            Judgment and the date upon which i4i receives payment from
            Microsoft as ordered herein.
        (j) Microsoft is permanently enjoined from performing the following
            actions with Microsoft Word 2003, Microsoft Word 2007, and
            Microsoft Word products not more than colorably different from
            Microsoft Word 2003 or Microsoft Word 2007 (collectively
            "Infringing and Future Word Products") during the term of the
            '449 patent:
              -  Selling, offering to sell, and/or importing in or into the
                 United States any Infringing and Future Word Products that
                 have the capability of opening a .XML, .DOCX, or .DOCM file
                 ("an XML file") containing custom XML;
              -  Using any Infringing and Future Word Products to open an XML
                 file containing custom XML;
              -  Instructing or encouraging anyone to use any Infringing and
                 Future Word Products to open an XML file containing custom
              -  Providing support or assistance to anyone that describes how
                 to use any infringing and Future Word Products to open an
                 XML file containing XML; and
              -  Testing, demonstrating, or marketing the ability of the
                 Infringing and Future Word Products to open an XML file
                 containing custom XML.

              This injunction does not apply to any of the above actions
              wherein the Infringing and Future Word Products open an XML
              file as plain text.

              This injunction also does not apply to any of the above actions
              wherein any of the Infringing and Future Word Products, upon
              opening an XML file, applies a custom transform that removes
              all custom XML elements.

              This injunction further does not apply to Microsoft providing
              support or assistance to anyone that describes how to use any
              of the infringing products to open an XML file containing
              custom XML if that product was licensed or sold before the date
              this injunction takes effect.

              This injunction takes effect 60 days from the dates of this
              order, which is August 11, 2009.

    Michel Vulpe, founder of i4i and an inventor of the '449 patent, says:
"We are very pleased with the terms of the Final Judgment. The financial award
due to i4i is now over $290 million and a Permanent Injunction has also been
issued against Microsoft." Mr. Vulpe adds, "We feel vindicated with this
result. i4i will do its utmost to support custom XML users, which is
particularly important to implement the ISO 29500 OOXML standard. "
    Loudon Owen, Chairman of McLean Watson Capital Inc. and i4i, says: "After
13 years of being Chairman of i4i Inc., I appreciate the extraordinary hard
work that has gone into both building the company and achieving this
successful judgment. The Permanent Injunction is an important determination
for i4i and for the rights of all patent owners." Mr. Owen adds, "We are
grateful to our partners, our investors and our legal counsel McKool Smith and
Tyler, Texas-based Parker, Bunt & Ainsworth, for their loyalty and commitment
to this significant accomplishment."
    Michael Cannata, director of i4i LP and advisor to the Northwater
Intellectual Property Fund, says: "This judgment demonstrates how a
specialized fund can bring capital and patent litigation management expertise
to a company with an important patented invention to help it level the playing
field when enforcing its rights against a much larger Corporation."

    i4i LP is a licensing entity affiliated with i4i Inc. i4i LP owns patent
No.5,787,449, issued by the United States Patent Office in 1998. Investors in
i4i LP include McLean Watson Capital and the Northwater Intellectual Property


    The technology in this case focuses on a particular type of electronic
documents. Generally, a "document" as manifested in a computer program has two
distinct parts: the content (i.e. the text that the user has created in the
document) and the structure (the encoding that allows the computer to
recognize the meaning of the text). A type of structural information within an
electronic document sometimes comes in the form of "metacodes." Standardized
computer languages were developed that utilized metacodes to allow a computer
to understand the meaning behind certain text that a user placed in a
document. An early example of these languages is the Standard Generalized
Markup Language ("SGML"). Later, a markup language was developed called the
Extensible Markup Language ("XML"). Asserted U.S. Patent No. 5,787,449 (the
"'449 patent") is entitled "Method and System for Manipulating the
Architecture and the Content of a Document Separately from Each Other." The
'449 patented invention created a reliable method of processing and storing
content and metacodes separately and distinctly. The data structure primarily
responsible for this separation is called a "metacode map." According to the
patent, the "metacode map" allows a computer to manipulate the structure of a
document without reference to the content.
    Microsoft is the developer of popular word processing and editing
software known as Word ("WORD"). Over the years, WORD has had many versions
with increasing functionality. In 2003, Microsoft introduced a version of WORD
with XML editing capabilities. This functionality continued in the latest
version of WORD, "Word 2007." On March 8, 2007 i4i LP filed this action
alleging that Microsoft infringed the '449 patent. A jury trial commenced on
May 11, 2009. At trial, i4i contended that Microsoft's use of certain WORD
2003 and all of WORD 2007 products for processing XML documents with custom
XML elements infringed claims 14, 18, and 20 of the '449 patent. i4i further
argued that Microsoft's infringement of the patent was willful. Microsoft
claimed that its WORD products did not infringe the patent and that the patent
was invalid.
    Following a seven day trial, the jury returned a verdict finding the
patent valid and infringed and awarding i4i $200,000,000 in damages. The Court
also conducted a bench trial regarding Microsoft's additional equitable
defenses of laches and inequitable conduct.

    To view the court documents, please click here:

For further information:

For further information: Loudon Owen, lowen@mcleanwatson.com or (416)

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