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Microsoft vs. i4i case at U.S. Supreme Court has big implications for patent law

Sun, 04/17/2011 - 5:17am
LuAnn LaSalle-Associated Press

A fight between small Canadian company i4i and software giant Microsoft Court is going all the way to the U.S. Supreme Court in a case that could challenge how patent laws protect exclusive technology.

Toronto-based i4i has been battling Microsoft in a multimillion-dollar patent infringement suit since 2007. A host of tech industry insiders and observers are lining up to have their say on both sides when the case is heard Monday in Washington.

Two lower courts in the U.S. have ruled that Microsoft used i4i's technology in some versions of its best selling Word software program with a Texas jury awarding the company US$290 million in damages in 2009.

But Microsoft (Nasdaq:MSFT) has fought that ruling as far as the legal system will allow. The software giant couldn't be reached for comment, but is expected to challenge current standards for overturning patents.

"They have the right to keep appealing and that's what they're doing," said i4i chairman Loudon Owen, who wants the U.S. Supreme Court to uphold current patent laws when deciding the case.

Loudon said the established laws for overturning a patent requires "clear and convincing" evidence and should be maintained, noting that once a patent expires anyone can use the intellectual property involved. He believes that exclusive intellectual property needs to be protected and properly licensed for others to use.

"The patent you're granted has very little meaning if it's not enforceable. Why have a patent if it's useless?" he said.

"When you get a patent you put your heart and soul into the invention, you work tremendously hard and you spend a lot of money. But if all of a sudden it becomes apparent to everybody that the patent itself is worthless, why do it?"

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.

If i4i loses, it will be a blow to inventors and creators, said Loudon. "It's a turning point in patent law."

The U.S. government, inventors, venture capitalists and a number of biotech and pharmaceutical companies have lined up behind i4i, while Google, Apple, Intel Corp. and others are supporting Microsoft in its efforts to make it easier to invalidate patents.

Patent expert Alexander Poltorak said the case is a potential threat to long-established patent law in the United States.

"Their fight is somewhat of an epic for the future of U.S. patent law," said Poltorak, chairman and CEO of U.S.-based General Patent Corp. in New York.

He noted that about half of all patents issued in the United States go to non-U.S. residents.

"So it's an issue of global proportions," he said, adding that if i4i loses it would be "devastating for the entire intellectual property business in the United States."

Poltorak said it's not unusual that Microsoft has taken the case all the way to the Supreme Court.

"They do not want to appear weak. Even if you win, it will be extremely expensive and it will take a long time before you even see a dime from them."

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