Is Microsoft violator or victim in i4i patent dispute?

Perhaps they don't use Microsoft Office at the courthouse in Tyler, Texas? Could there be no computers at all and just Selectric typewriters? I have to wonder following yesterday's injunction barring Microsoft from shipping Word.

I'm being snide because Tyler is the reputed "patent troll" capital of North America. Plaintiffs tend to win big judgments there, and surrounding vicinity, against companies like Microsoft. As such, it's easy to dismiss yesterday's court judgment as meritless. But is it?

Toronto-based i4i claims that Microsoft infringed on US patent 5,787,449, which was issued in July 1998. In March 2007, the company filed the case in Tyler, where a jury later found for i4i.

Come One, Come All Patent Trolls

Tyler is located 62 miles west of Marshall, another popular jurisdiction for filing patent lawsuits. Eighty-one miles to the south is Beaumont, where a lawsuit against Toshiba led to a $2.1 billion settlement in 1999. Southeast Texas is a popular venue for patent trolling. Patent defendants include Apple, Autodesk, Microsoft, National Semiconductor, Nintendo, Samsung, SanDisk and Sony. Some cases of interest:

  • In November 2008, EMG Technology filed an infringement claim against Apple, less than a month after the patent was issued.
  • The same month, a jury found that Sony violated an Agere patent and ordered payment of $18.8 million.
  • In May 2009, a jury found that Microsoft violated the aforementioned i4i patent.

The Administrative Office of the U.S. Courts tracks the number and kind of cases filed each year. During 2008, in the Eastern Texas U.S. District Court, 358 of the 2,866 civil cases related to copyrights, patents and trademarks. There were even more contract disputes, 390, and 185 personal injury/liability cases. If that doesn't seem excessive, here's some perspective. The were 5,459 civil cases filed in Eastern New York District Court last year, only 170 of which were for copyrights, patents and trademarks. About twice as many civil cases, but only around half as many copyright, patent or trademark filings.

By venue, i4i's patent victory is easily dismissed. But the company nor the case are atypical for Tyler. Most patent-troll cases share fairly common characteristics:

  • Most plaintiffs are companies or individuals, rather than, say, Apple, IBM or Microsoft.
  • Patents tend to have been recently issued, typically not long before an infringement claim is filed.
  • Plaintiffs typically don't produce actual products or offer services, which in many other court jurisdictions would raise questions about the patent's legitimacy.
  • Plaintiffs demand a jury trial, and the case either goes to jury or to settlement.
  • Area of filing is well known for either judges or juries favoring patent holders over defendants.

But i4i is for real, selling XML-based collaborative solutions, mostly to pharmaceutical companies. The patent's age and existence of a real company producing real products makes this case look quite different from the typical patent troll case filed in Tyler or the surrounding area.

Here's where I qualify that I am not a patent attorney. That said, I've covered enough Microsoft legal cases to know how to read and interpret legal findings. On this rarest of occasions in Southeast Texas, perhaps Microsoft has a problem.

Office Not so Open

For years I have bitched about Microsoft and XML. So-called "modern" Office file formats aren't XML, as Microsoft has claimed. They're XML-based. I was an early and fierce critic of Microsoft calling the formats Office Open XML, or OOXML. They're not "open" nor are they XML.

Microsoft file formats use proprietary schemas and allow Office customers to generate their own custom schemas. These custom schemas are akin to proprietary dialects. That's where "open" leaves OOXML. Two people can agree to talk the same language, but communication breaks down if one person uses a dialect or jargon the other doesn't understand. Office openness breaks down with Microsoft schemas. That said, there are places where that jargon, the custom schemas, make sense for how business manipulate data.

Starting with Office 2003, Microsoft heavily touted custom schemas' value to businesses needing to better define their data. Some of that definition is regulated, such as XML content submitted to the US Federal Department of Agriculture. Could it be coincidence that pharmaceuticals, where is i4i's main customer base, one of the markets Microsoft repeatedly touted as benefitting from custom schemas? Some examples from Microsoft's Website:

While Microsoft touted the value of custom XML schemas around Office System for several industries, pharmaceuticals stand out -- and it's i4i's principal market. Then, in the midst of this counter marketing, Microsoft did something i4i decided had violated its patent, which abstract states:

A system and method for the separate manipulation of the architecture and content of a document, particularly for data representation and transformations. The system, for use by computer software developers, removes dependency on document encoding technology. A map of metacodes found in the document is produced and provided and stored separately from the document. The map indicates the location and addresses of metacodes in the document. The system allows of multiple views of the same content, the ability to work solely on structure and solely on content, storage efficiency of multiple versions and efficiency of operation.

Does Custom XML Violate i4i's Patent?

Based on my reading of i4i's March 2007 legal complaint, and other documents associated with the case, changes Microsoft made to better support customer needs for custom schemas and other data led to the core infringement. In Office, Microsoft provides proprietary schemas, such as WordprocessingXML to define data. But custom schemas, as I explained paragraphs ago, let businesses use definitions specific to their data needs.

Before the release of Office 2007, Microsoft starting referring to custom schemas in context of "custom XML." Microsoft's Brian Jones explained the change and reason for it a November 2005 blog post:

In Office 2003, Word and Excel both introduced support for marking up content in the files with custom defined schema, but one of the big things we saw from folks building solutions on top of our XML support in Office 2003 was the need to store your own XML data in the document. We had support for marking up a document with your own schema, but if you had data you didn't want to show to the user, there weren't a lot of options...In Office 12, we've introduced a new feature to the formats that we're currently calling the XML data store, and the way it works is really simple. As you should all know by now, the new format consists of a ZIP file with a bunch of XML parts (files) inside. Up until now we've talked about all the parts that we in Office have defined to create our documents...You can take any XML file and put it inside the ZIP package. Then all you need to do is create a relationship from the main document part to your XML part.

Microsoft used the ZIP file as a way of breaking up the format, allowing businesses to extract just the raw XML. But they can also add to it. Jones explains in the blog post: "The ability to put your XML in the ZIP package means that you now have a place to store any data your solution may need."

The i4i patent is called "Method and system for manipulating the architecture and the content of a document separately from each other." It's more practical application is some of the XML-based solutions, i4i offers today for pharmaceutical companies. A jury decided that the patent also applies to "custom XML" in Microsoft Word. Consider Microsoft custom XML support around the ZIP storage container, how customers can manipulate content and extract from or add to the container architecture.

Again, qualifying that I am not a patent attorney, to my eyes, the case has merit. Perhaps i4i carefully chose the venue of Tyler, Texas, but this doesn't look to me to be a patent troll case.

Even for Tyler, it's unusual for a judge to issue an injunction prohibiting sale of a major product, particularly something as widely used as Microsoft Word. The injunction says something about the seriousness of the violation.

How serious? The judge applied the "permanent" injunction not just to Word 2007, but the 2003 version and and "Microsoft Word products not more than colorably different from Microsoft Word 2003 or Microsoft Word 2007...Future Word Products." He specifically notates "custom XML."

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