Microsoft warns of chaos if Word sales halted

Microsoft Corp.warned last week that an injunction preventing it from selling Word in the U.S. after Oct. 10 would cause “massive disruptions” to sales of its Office software, as well as to key partners like Best Buy Co., Dell Inc. and Hewlett-Packard Co.

A week earlier, U.S. District Court Judge Leonard Davis had issued the injunction and ordered that Microsoft pay $290 million in damages and interest to Toronto-based i4i Inc. for infringing on that company's patent for a document system that uses XML custom formatting.

The i4i technology allows users of Word 2003, Word 2007 and Word for Mac 2008 to create custom XML documents.

In its emergency motion filed Aug. 18 with the U.S. Court of Appeals, Microsoft warned of the business disruption and asked that the injunction be stayed during the appeal.

“Even if Microsoft ultimately succeeds on appeal, it will never be able to recoup the funds expended in redesigning and redistributing Word, the sales lost during the period when Word and Office are barred from the market, and the diminished goodwill from Microsoft's many retail and industrial customers,” Microsoft argued.

The company also said that an injunction would “inflict irreparable harm on Microsoft by potentially keeping the centerpiece of its product line (Office) out of the market for months.”

Barry Negrin, a partner at New York law firm Pryor Cashman LLP who has practiced patent and trademark law for 17 years, said that Davis' conclusion that Microsoft willfully infringed on the i4i patent will probably hurt the company's chances for an injunction.

In a 65-page summary opinion, Davis said that Microsoft knew of the patent held by i4i as early as 2001 but nevertheless set out to make the Canadian developer's software “obsolete” by adding a custom XML feature to Word.

Negrin also contended that Microsoft could use an ” easy technical work-around” to sidestep the injunction.

“All Microsoft has to do is disable the custom XML feature, which should be pretty easy to do, then give that a different SKU number from what's been sold, so it's easy to distinguish the two versions,” he said.

Microsoft requested that the court order i4i to respond to its motion by Aug. 24, and it promised to reply to any i4i response by Aug. 28.