A Texas judge’s order that Microsoft pay more than $240 million in damages to an obscure Canadian firm and stop selling its popular Word program within 60 days appears to have triggered more patent suits against the software maker in the plaintiff-friendly Lone Star State, InformationWeek has learned.

Allvoice Developments US, a provider of speech recognition systems, and mobile software developer EMG Technology both filed suits against Microsoft in recent days in the U.S. District Court for Eastern Texas, where judge Leonard Davis a week ago ruled in favor of Toronto-based i4i in its action against Microsoft.

Allvoice claims that speech recognition support built into Windows XP and Windows Vista violates its patent on the technology. Allvoice also alleges that Microsoft discussed using its technology in Windows but later rejected it. Allvoice is seeking unspecified damages against Microsoft.

EMG, meanwhile, contends that Microsoft’s Windows CE, PocketPC, and Windows Mobile products infringe its patent for viewing Web content on a mobile device. EMG also lists investment broker Scottrade and Southwest Airlines in its complaint.

EMG is seeking unspecified damages.

While the actions might ordinarily be dismissed as nuisance suits brought by patent trolls (EMG, which has a barely functioning Web site, previously filed a case against Apple), Judge Davis’ stunning order last week in favor of i4i shows anything’s possible in the Eastern Texas federal court jurisdiction.

A 2006 New York Times article labeled the Eastern District’s Marshall, Texas base “the patent lawsuit capital of the nation, where plaintiffs are more likely to get a favorable judgment.” Some of the Court’s rulings have raised concerns about software patents and sparked calls for reform.

Davis last week took the unprecedented step of ordering Microsoft to stop selling Word 2003 and Word 2007 in the U.S. within 60 days. The decision shows just how far Eastern Texas jurists are willing to go—not only at the expense of corporations but also at that of consumers—to protect what they see as patent plaintiff’s rights.

Microsoft said it plans to appeal Davis’ ruling. On Friday, the company filed an emergency motion that would forestall its having to post a bond against the millions in dollars in damages Davis levied against it—including $40 million the judge imposed for what he said was Microsoft attorneys’ trial misconduct.

Source: InformationWeek

SEATTLE — A federal district court judge has ordered Microsoft (MSFT) to stop selling Word in the U.S. — and the tiny company behind the lawsuit is digging in for a David vs. Goliath showdown.

Toronto-based i4i, which has 30 employees, claims that Microsoft violated an obscure patent related to Extensible Markup Language or XML. It’s a key software component of many websites and computer programs, including Word.

Judge Leonard Davis agreed Tuesday, ordering Microsoft to pay $290 million in fines and stop selling Word in the U.S. in 60 days. That could derail a core business for the world’s largest software maker.

As part of Microsoft Office, Word is used by hundreds of millions of people worldwide. Office accounted for more than $3 billion in sales in the company’s last fiscal year.

“It’s not a question of fear or pride or anything else,” Loudon Owen, i4i chairman says. “We’re very respectful of Microsoft, but when you’re in the right you have to persevere.”
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Microsoft plans to appeal. “We are disappointed by the court’s ruling,” said Microsoft spokesman Kevin Kutz in a statement. “We believe the evidence clearly demonstrated that we do not infringe and that the i4i patent is invalid.”

I4i, which mainly makes software for drug and defense companies, obtained the patent for a “customized XML” tool in 1998. XML is a specialized alphabet that can capture any kind of computer file as a regular text.

Microsoft started using XML as an alternative way to save Word files in Word 2003 and made it the default format for all Office files in Office 2007.

This made it easier for Microsoft and its partners to create programs such as accounting software that generates reports in Word formats, says Rob Helm, analyst at research firm Directions on Microsoft.

I4i sued Microsoft in 2007, claiming that Word uses the patented process. Now, “Microsoft is behind the eight ball and has 60 days to see if it can get the federal appeals court to stay the injunction,” says Henry Sneath, a Pittsburgh intellectual property lawyer.

No one expects Microsoft to actually pull Word off the market. It’s a big company with deep pockets that has faced many legal challenges over the years. It could win the appeal, settle with i4i, or even buy out the company.

Source: USA Today