So, what is the patent infringement really about? A study of United States Court of Appeals judgement document 09-1504.pdf dated 2009/12/22 and some other relevant documents points to the following:

1. i4i is a Canadian company started in 1998 and helps develop and maintain customized software for its customers.

2. In June 1994, i4i applied for a patent concerning a method for processing and storing information about the structure of electronic documents. This patent was granted to the company in 1998 and the technology was later used in “add-on” software for Microsoft
Word, expanding Word’s capability to work with documents containing custom XML. In the patent document i4i is named as Infrastructures for Information, Inc.

3. The patent claims the improved technology as stemming from storing a document’s content and metacodes separately.

4. Apparently, Microsoft used this same “improved technology” in Microsoft Office 2003 and 2007.

i4i sued Microsoft in 2007 saying that Microsoft knowingly infringed one of i4i’s patents in its Word application and its Vista operating system.

In August 2009, a Texas district court ruled in favor of i4i and filed an injunction preventing Microsoft from selling Word 2003 and 2007.

Microsoft appealed and yesterday (12/22/2009) the Court of Appeals upheld the lower court’s verdict. The court judgement document talks about a jury award of $200 million to i4i. The court was authorized to triple the jury’s damages award because of Microsoft’s willful infringement, but the district court awarded only $40 million in additional damages. Press reports about $290 million in damages are not clearly adding up, unless I am missing something.

According to Microsoft’s press statement on its website,

This injunction applies only to copies of Microsoft Word 2007 and Microsoft Office 2007 sold in the U.S. on or after the injunction date of January 11, 2010. Copies of these products sold before this date are not affected.

With respect to Microsoft Word 2007 and Microsoft Office 2007, we have been preparing for this possibility since the District Court issued its injunction in August 2009 and have put the wheels in motion to remove this little-used feature from these products. Therefore, we expect to have copies of Microsoft Word 2007 and Office 2007, with this feature removed, available for U.S. sale and distribution by the injunction date. In addition, the beta versions of Microsoft Word 2010 and Microsoft Office 2010, which are available now for downloading, do not contain the technology covered by the injunction.

Related links:
Statement on Microsoft’s website
Statement on i4i’s website (pdf)
Court Judgement Document
Patent Document