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Appeals court again sides with i4i over Microsoft in Word case

The U.S. Appeals Court refuses to hear yet another Microsoft appeal of a jury's US$240-million award for IP infringement of the Toronto company

Microsoft Corp. (NASDAQ: MSFT) is nearing the end of the line for appeals of jury’s verdict that it willfully infringed on patents awarded to Toronto company i4i Inc.

On Thursday, the U.S. Court of Appeals denied Microsoft’s request for an en banc hearing before the full 12-member court. Microsoft made the request in early March, after a three-judge panel upheld a US$240-million judgment against the company over custom XML technology in Microsoft Word. The court ordered Microsoft to strip certain features from the software beginning in January.

Microsoft’s last avenue of appeal is the Supreme Court.

I4i filed suite against Microsoft in May 2007. In May 2009, a Texas jury ruled in favour of i4i. There have been “four or five” appeals since then, “depending on how you count them,” said i4i CEO Loudon Owen.

“At this point, we’re simply trying to say we’re here, we’re going to keep battling on,” Owen said.

Owen said he expects Microsoft to continue fighting the decision, and the continuing litigation is making strategic planning difficult for i4i.

“We’re in the infrastructure business,” Owen said, which is “predicted on loner-term rollouts.” The company has focused on solutions in particular verticals, particularly pharmaceuticals. He said i4i will expand to other verticals “when it’s appropriate.” But decisions about monetizing the core technology are taking a back seat at the moment.

“It’s very difficult to sit back and make (long-term strategic decisions) when you’re in the middle of consuming litigation,” he said.

Microsoft is reviewing its options. “We continue to believe that there are important matters of patent law that still need to be properly addressed,” a spokesperson for the company told Reuters news agency.