Another example of how the patent system is being used to hinder, rather than help, innovation. While we’re no fans of Microsoft’s view on patents these days, that doesn’t mean we approve of ridiculous lawsuits against the company either. The one that got all the attention this year was a tiny Canadian startup, i4i, that claimed a patent (5,787,449) on editing an XML document, and then sued Microsoft and won (in Texas, of course). Not only did the company win, but the court ruled that Microsoft owed $98 per copy of Microsoft Word for this minor feature. On top of that, the court issued an injunction saying Microsoft could no longer sell Microsoft Word with this feature. Given the MercExchange ruling that said that injunctions don’t always make sense in patent cases, it was hard to defend such an injunction as being necessary.
But… never let common sense get in the way of how the judicial system works when it comes to patents. The appeals court (CAFC) has now upheld the lower court ruling, requiring Microsoft to pay the $290 million and bars further sales of any copy of Microsoft Word with this feature as of January 11th. Microsoft’s response is that it will simply remove this “little-used” feature. So this feature is rarely used, and yet it’s worth $98 per copy of Word sold? How does that make sense?
Meanwhile, the tiny Canadian company is thrilled. It just made hundreds of millions of dollars for stating the obvious. And, rather than encouraging innovation, it’s forcing a company to remove features. How is that innovative? How does that do anything at all to “promote the progress”? While some Canadian law professors might like to make up facts as to why these types of rulings make sense, I’m still at a loss as to how progress has been promoted here.
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