Microsoft loses $290 million in patent battle

The US Supreme Court ruled against Microsoft Corporation on Thursday in its appeal of a record $290 million jury verdict for infringing a small Canadian software firm’s patent. The justices upheld a US appeals court’s ruling that went against the world’s largest software company in its legal b attle with Toronto-based i4i. The Supreme Court rejected Microsoft’s argument to adopt a lower standard to replace the long-standing requirement that a defendant in a patent infringement case prove by clear and convincing evidence that a plaintiff’s patent is invalid.

i4i sued Microsoft in 2007, claiming infringement of a patent relating to XML in documents by Word 2007. At a subsequent jury trial, Microsoft had argued the patent was invalid but the jury rejected that claim. It then appealed to the supreme court, saying the trial court’s requirements had put an “overly demanding” standard to its invalidity defence: it had had to prove its defence by “clear and convincing” evidence, rather than the more relaxed “preponderance of evidence”. The difference would be similar to a criminal v civil standard of proof, between “beyond all reasonable doubt” and “balance of probability”.

i4i said Microsoft sought a radical change in patent law and that any change should come instead from Congress, which has been considering patent legislation. The legal battle began in 2007 when i4i sued Microsoft for infringing its patent relating to text manipulation software in 2003 and 2007 versions of Word, Microsoft’s word processing application.

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