Microsoft Office, which includes Word, accounted for more than $3 billion in worldwide sales in Microsoft's most recent fiscal year and is used by literally millions of businesses and consumers for everyday tasks like word processing and making spreadsheets and presentations.
I4i, a Toronto-based software maker, has been battling Microsoft over an obscure patent related to XML or Extensible Markup Language. XML is a key software component of many websites as well as Word and other programmmes.
Upholding a May 20 jury decision Tuesday, Leonard Davis, a federal district court judge in Tyler, Texas, banned the world's largest software from selling Word 2003, Word 2007 and future versions of the software that use i4i's technology without a licence.
The judge also ordered Microsoft to pay several hefty fines to i4i, including $200 million in damages and $40 million in "enhanced damages".
"We feel vindicated with this result," said Michael Vulpe, who co-founded i4i in 1993.
"It is not a question of fear or pride or anything else," said Loudon Owen, chairman of i4i. "We're very respectful of Microsoft, but when you're in the right you have to persevere."
Microsoft plans to appeal. "We are disappointed by the court's ruling," spokesman Kevin Kutz said in a written statement. "We believe the evidence clearly demonstrated that we do not infringe and that the i4i patent is invalid."
The suit involves a patent i4i's founders obtained in 1998 that is the basis for a "customised XML" tool the company supplies to drug and defence companies and other large corporations, said Owen.
XML is a specialised alphabet that can capture any kind of computer file as a regular text. It's designed to make computer data human-readable -- and make it easier for one programme to load and process data created by another programme.
Judge Davis found that Microsoft was aware of i4i's patent and that there was enough evidence of Microsoft "wilfully infringing" on the patent to issue the injunction, pending continuation of the case.
Investors shrugged off the news -- perhaps in anticipation of a higher court overturning the ruling, which arose from the plaintiff-friendly Eastern Texas federal jurisdiction, Information Week reported.
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