Appeals court grants Microsoft reprieve in Word case

A federal appeals court late granted Microsoft's request to suspend an injunction that would have barred the company from selling its Word software next month.

In a short order filed near the end of the day, the Court of Appeals for the Federal District approved Microsoft's earlier request for a stay of the injunction.

“Without prejudicing the ultimate determination of this case by the merits panel, the court determines based upon the motion papers submitted that Microsoft has met its burden to obtain a stay of the injunction,” the court said.

The injunction would have prevented Microsoft from selling Word 2003 and Word 2007 in their current forms after Oct 10, and was ordered by U.S. District Court Judge Leonard Davis on Aug. 11, after the company was found guilty in May by a Texas jury of infringing a patent held by Canadian software developer i4i. Davis also awarded i4i more than $290 million in damages and interest.

On Aug. 18, Microsoft filed a motion to stay the injunction while it took the case to appeal. In that motion, Microsoft warned of “massive disruptions” to its sales, as well as those of important OEM partners such as Dell and Hewlett-Packard, if the injunction was not put on hold.

Microsoft also said that the injunction, and the resulting need to retool Word to remove the infringing “custom” XML feature, could keep Word 2003 and Word 2007 — and the suites that they are part of, Office 2003 and Office 2007 — off the market for months.

Several days later, Microsoft was granted a fast-track appeals process, which requires i4i to file a response to Microsoft's appeal by next Tuesday, Sept. 8. Microsoft's rebuttal must reach the court by noon on Sept. 14.

Both Dell and HP have filed amicus curiae, or “friend of the court,” briefs, arguing that Word's revision, and the resulting changes necessary on their part to re-image new PCs, would “require extensive time- and resource-consuming retesting.”

Dell and HP also asked that, assuming a stay was not granted, that the injunction be postponed by 120 days.

“We are happy with the result and look forward to presenting our arguments on the main issues on September 23,” said Microsoft spokesman Kevin Kutz in an e-mail today.

Kutz's reference was to the oral hearing before the Court of Appeals, during which both sides will present their cases. The three-judge panel will render its verdict at some point after the Sept. 23 hearing.

i4i also said it believed it would persevere in the end. After accusing Microsoft of using “scare tactics” in its plea for a stay, Loudon Owen, i4i's chairman said, “i4i is confident that the Final Judgment in favor of i4i, which included a finding of willful patent infringement by Microsoft and an injunction against Microsoft Word, was the correct decision and that i4i will prevail on the appeal.”