Court could decide dispute between Microsoft, Canada’s i4i

MONTREAL — The patent battle between small Canadian tech company i4i and software giant Microsoft Corp. was always expected to be a legal fight to the finish.

MONTREAL — The patent battle between small Canadian tech company i4i and software giant Microsoft Corp. was always expected to be a legal fight to the finish.

Now, after several rounds in the lower courts that saw a big damage claim awarded to the Canadian company by a Texas jury, the dispute could be going all the way to the United States Supreme Court if Microsoft gets its way.

“I am sure it makes for a great soap opera and for great headlines, but the truth is this a question of patent law and patent infringement,” i4i chief technology officer Michel Vulpe said Monday, responding to Microsoft’s move late last week to take the case to the U.S. Supreme Court.

“We see that not only as an issue for us but as an issue (for) all patent holders, to have their rights enforced and to make it clear that companies … like Microsoft, despite their resources, simply can’t walk over small patent holders,” Vulpe added.

Microsoft wants the U.S. high court to hear the case, which involves a dispute over software used in some versions of Microsoft Word.

“Our petition to the Supreme Court focuses on proper standards of proof to determine the validity of a patent, which is a crucial issue for the proper functioning of the patent system,” Microsoft spokesman Kevin Kutz said in a statement on Monday.

The patent infringement case involves some versions of Microsoft Word 2003 and 2007 that allegedly use i4i’s technology to process electronic documents.

If the U.S. high court decides not to hear the case, it’s the end of the legal road for Microsoft and it will have pay a total of US$290 million in damages that were awarded to i4i at a jury trial in Texas last August. The legal battle between the two companies began in 2007.

Patent lawyer Victor Krichker said there hasn’t been a settlement in the case because it’s about more than Microsoft believing it hasn’t infringed on i4i’s patent.

“A large company does not want to be known as an easy target for patent infringement claims,” said Krichker, partner and head of the high technology practice at Bereskin and Parr in Toronto.

“You definitely want to be known in the industry as somebody that doesn’t roll over when these kinds of claims happen.”

While the cost of an appeal is significant, Krichker said, it’s not as much as the damages awarded by the jury.

He said the case is notable because it involves a small Canadian company that has been successful so far in its battle against Microsoft, but he said he would be “somewhat surprised” if the Supreme Court agrees to hear it.

“It’s an interesting story, especially for Canadian companies, but it’s not necessarily a terribly important legal precedent,” he said, adding that there aren’t “any huge, controversial legal issues” in the case.

However, Microsoft’s Kutz said the U.S. Court of Appeals’ ruling in the case “departs not only from Supreme Court precedent, but from the rulings of all the other appellate courts, and we are asking the Supreme Court to resolve this conflict.”

How the damages were calculated — based on a royalty rate — was also somewhat controversial and it has made people in the industry take another look at how damages are determined, Krichker said.

Loudon Owen, chairman of i4i, said this is Microsoft’s “last shot — we hope.”

While many of i4i’s customers are pharmaceutical companies such as Bayer, Merck and Nexgen Pharma, the company also supplied technology to the U.S. patent office earlier this decade for an overhaul of its website for patent submissions.