Three cheers for Goliath: Microsoft Word and the battle for ideas

It's always a kick to watch little David saunter onto the battlefield, load his slingshot and knock off the dominant, arrogant Goliath. We all enjoy rooting for the little guy, and whenever he prevails over the odds-on favorite, we can't help but feel that all is right with the world.

Sometimes, though, Goliath needs to pound his tiny adversary into the ground.

Microsoft found itself on the wrong end of a patent infringement judgment in the US District Court for the Eastern District of Texas earlier this week. Judge Leonard Davis upheld an earlier jury verdict against Microsoft in a long-running patent dispute launched by Toronto-based i4I Inc. Davis ruled that Microsoft wilfully violated i4i's parent that covers specific methods used to read custom XML files.

That's not the scary part for the hundreds of millions of people who spend the bulk of the workday in Word. Beyond increasing the original $200 million in damages to $290 million, Davis also imposed a permanent injunction against sales of Microsoft Word 2003 and 2007. Assuming nothing changes from this point onward, Microsoft will no longer be able to sell Word in the US in 60 days. And if you want technical support when opening custom XML-based documents, you'll be out of luck, too, as Microsoft's help desks will be banned from answering any related questions.

Look at me, says the judge

Don't buy the hype for a second. Although headlines screaming about the impending death of Word make for memorable moments around the water cooler, it's difficult to believe that a hyperbolic injunction governing one of the key instruments of modern business would ever actually be implemented. This is little more than a blatant grab for attention by an otherwise anonymous judge, and another example of how small companies that feel they've been wronged try to level the playing field by going directly for Goliath's jugular.

I'm inclined to believe we'll all still be able to buy Word in 60 days for a number of key reasons:

1. The fight isn't over. Microsoft has already announced it will launch an appeal. Given the glacial pace of justice, the injunction will be covered with a thick layer of dust by the time every last motion is launched, debated and settled.
2. East Texas is a patent troll's dream. The numbers don't lie. If you're a plaintiff in a patent case and you want a court that's friendly to your plight, you seek out East Texas. According to the Patent Prospector, file your case in East Virginia or Western Wisconsin courts and you've got an even chance of winning. Go to Mid-Florida and your success rate bumps to 55%. The highest patent holder success rate, 67%, belongs to East Texas. If it goes to trial, you're in even better shape: Plaintiffs win fully 71.9% of their cases here, with median damages topping out close to $20 million per case. Can we say "cha-ching?"
3. Replacement is always an option. Microsoft is certainly capable of developing alternative technology and releasing it as a patch or an update. It isn't inexpensive, easy or without risk -- which largely explains why the company has been duking the issue out in court for the better part of five years and still hasn't gone down the tech-replacement route. But it's not unheard of, and Microsoft can work around the issue more easily than its David-like, less resource-rich opponent.
4. Brinkmanship is the name of the game. The most eye-catching headlines get everyone's attention, and it doesn't get more eye-catching than "Word is dead." But i4i's goal isn't to put Microsoft out of business. It's to push the software giant as close to the edge as it can to squeeze the largest possible settlement out of the deal. It's a great negotiation strategy, and it's working.
5. Microsoft and i4i were once friends. Way back in the days of Office 97 and 2000, Word had no way of natively supporting custom XML documents or templates. Microsoft looked to i4i to develop a plug-in that added this functionality. When Microsoft natively included this type of XML capability in Word 2003 -- and subsequently 2007, as well -- the situation soured between the two, and i4i launched the legal proceedings that culminated in this week's ruling.
6. The plaintiff is out of business if Word dies. Even as the case has ground through the courts, i4i has built a consistent business creating tools that allow companies (mostly pharmaceutical firms) to create forms and other front ends that allow for rich data entry and collaboration. The tools are built both on and in Microsoft Word, so if the parent application disappears, so, too, does i4i's business model.

Beyond the legal machinations and inflated damage claims that are par for the course in cases like this lies the stark reality that Word is not just a piece of software. It's an institution that for many of us governs how we spend our day, create our work, and share it with our colleagues, clients, friends and family. We can argue, correctly, that the days of shrink-wrapped software are drawing to a close as Web services become ever more sophisticated. We can also argue that Microsoft has a limited window of time to carve out a post-Office business strategy. But we're still nowhere near the tipping point, and for now at least, the thought of a Word-less world is laughable.

The actual threat lies elsewhere

It's easy for a district court judge to make what seems to be an historic ruling when he knows full well it'll be turned over on appeal. I suspect an appellate judge for a higher court would spend more time weighing the market-impacting implications of such a ruling and less time managing the ensuing PR and media storm.

For all of those who use Microsoft Word, it'll be business as usual for as long as they want it to be. The real threat is longer-term, and comes from the Web. If anyone's going to kill the Goliath word processor -- and its sibling Office products as well -- it won't be a small developer of collaborative applications from north of the border. David won't win so easily this time, and Goliath will live on to fight a much more evenly matched opponent before long.

Carmi Levy is a Canadian-based independent technology analyst and journalist still trying to live down his past life leading help desks and managing projects for large financial services organizations. He comments extensively in a wide range of media, and works closely with clients to help them leverage technology and social media tools and processes to drive their business.