Microsoft's move toward XML standards leads to $200 million penalty

During the era of Office 2000's dominance in the desktop applications market, Microsoft was frequently criticized for forcing businesses into supporting a document format that was, by design, a moving target. Whenever the company added features to its Office components, support for those features had to be retrofitted onto the document format. That often made archives of thousands of older documents difficult for companies to manage.

It was a situation which many thought would enable Microsoft to self-perpetuate, creating dependencies from which businesses couldn't escape, forcing them to invest in whatever new versions that came along just to maintain their efficiency. Whether it was attained by accident or design, it was such a prime market position for the company that when it announced in 2005 that it would sacrifice its own Office document formats for an entirely new, publicly viewable, XML-based scheme originally entitled Office Open XML, even Betanews asked the question, "Is It Truly Open?" To this day, even now that Microsoft's efforts led to the publication of an international standard based on OOXML, now called ISO 29500, people are wondering -- often aloud -- where's the string that's attached to this rug that Microsoft will eventually pull?

In the meantime, a company which was issued a patent in 1998 for the idea of maintaining a document's format in a separate file, has been awarded $200 million to a Toronto-based collaborative software firm, whose engineers claim they had the idea first. The case made by i4i Limited Partnership in its March 2007 suit essentially boiled down to the allegation that the entire move toward XML by Microsoft was a willfully executed strategy against i4i.

In 1994, just as HTML was first being investigated elsewhere as a vehicle for networked hypertext, i4i Ltd. applied for its US patent. For the time, its concept was novel as any notion of XML would be years away, and the applications for which XML would be used had yet to be envisioned.

"Electronic documents retain the key idea of binding the structure of the material with its content through the use of formatting information," reads the 1994 patent's background. "The formatting information in this case is in the form of codes inserted into the text stream. This invention addresses the ideas of structure and content in a new light to provide more flexible and efficient document storage and manipulation."

The engineers mention SGML, the markup language which formed the foundation for HTML. But SGML created problems with regard to formatting, as they went on to write: "While embedding structural information in the content stream is accepted standard practice, it is inefficient and inflexible in a digital age. For manual production of documents the intermingling of the markup codes with the content is still the best way of communicating structure. For electronic storage and manipulation it suffers from a number of shortcomings. Current practice suffers from inflexibility. Documents combining structure and content are inflexible because they tie together structure and content into a single unit which must be modified together. The content is locked into one structure embodied by the embedded codes. Changes to either the structure or the content of the document require a complete new copy of the document."

This is a problem which the flexible formatting of XML (which is called "eXtensible Markup Language" for good reason) went on to solve. For its part, i4i had much of the same idea, essentially for creating a way to use extensible tags to mean whatever they need to mean in the context of an electronic document. As an example cited by the 1994 patent application, the tag pair <Chapter> and </Chapter> could be used to denote a chapter number in the electronic manuscript of a book, and <Title> and </Title> may offset the book's title. The meanings of those tags with respect to the document at hand could be defined by a separate document, or by many separate documents pertaining to different classes of typesetting machines or displays.

Did i4i create XML? Not specifically, though it did receive a patent for one of its principal ideas, years before the W3C began to come to the same conclusions. However, despite being what many observers at the time considered late to the game in adopting XML, it is Microsoft that ended up the loser in what some analysts are saying could be among the top five willful patent infringement awards in US history. The company has made clear it will appeal the jury's verdict.