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Toronto software firm wins court appeal battle against Microsoft (Includes interview)

Microsoft was given until Jan. 11 — around five months from the original order issued in August — to alter its popular Word software by the U.S. Court of Appeals for the Federal Circuit in Washington. The court upheld a verdict – litigation which has since grown to $290 million – won by closely held I4i LP of Toronto.

At the heart of the issue is a way to retool extensible markup language, or XML, a method to encode data to exchange information among programs. i4i claims it patented the technology using the code, a technology that Microsoft freely uses in its Word software. It’s a feature used by some companies to add special data to Word files, such as information in forms submitted by customers.

“We feel vindicated,” says i4i’s chairman Loudon Owen in an interview with Digitaljournal.com. “We think it’s important the trial judge got it right.”

Owen explains how his company’s technology enables larger companies to manage mountains of data “that can’t be put into databases…We see the advantages to harmonize data less expensively.”

Microsoft call their XML editor an “obscure functionality.” Owen’s rebuttal? “If Microsoft doesn’t believe the feature it offered is integral to its customers, why did they release it in the first place?”

Copies of Word 2007 and Office 2007 will have this feature removed after Jan. 11. Also, “beta versions of Microsoft Word 2010 and Microsoft Office 2010, which are available now for downloading, don’t contain the technology covered by the injunction,” said company spokesman Kevin Kutz.

For the 30 staffers at i4i, it will be business as usual going forward. Well, more business, Owen hopes. “Now we can get innovative for customers that need our help,” he says. On winning this seemingly final stage of the legal battle against Microsoft, Owen remarks, “Smaller enterprises can and should win against major players, because that’s at the heart of the next growth stage in the economy.”

There is no word yet on whether Microsoft will ask for this case to be heard by the Supreme Court.

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