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Appeals court weighs Word injunction

Microsoft is hoping to overturn a ruling that versions of Word infringe on a patent held by Canada's I4i. It also faces $200 million in damages and an injunction.

A federal appeals court on Wednesday heard arguments over whether to uphold an injunction that would ban sales of Microsoft Word in its current form.

Microsoft is appealing a jury's ruling that a custom XML feature in recent versions of Word infringes on a patent held by I4i, a Canadian software company. The jury ordered Microsoft to pay $200 million, while a judge raised that amount and also issued the injunction, although it has been temporarily put on hold while Microsoft's appeal is being heard.

The hearing before a three-judge panel in Washington, D.C., lasted about 90 minutes, with lawyers from both sides making their case.

"At today's hearing we emphasized three points for why a reverse judgment or retrial is warranted: courts need to construct claims properly, the patent is not valid and we do not infringe it, and common sense can't be abandoned when it comes to damages calculation," Microsoft spokesman Kevin Kutz said in an e-mailed statement. "We are pleased with how the hearing proceeded and we look forward to the Court's ruling.

For its part, I4i said Microsoft's arguments are the same ones that have been unsuccessful in prior hearings.

"The good thing is there was nothing surprising," I4i Chairman Loudon Owen said in a telephone interview on Wednesday. "It was the same thing that failed at trial."

A ruling from the appeals court is expected soon, but no specific time frame was given by the court on Wednesday. I4i executives expressed hope that the ruling will come soon, but such decisions can often take two to four months, or even longer in some cases.

Should Microsoft lose its appeal, the software maker could also pursue a technical workaround that allows the custom XML function to work in a different way that doesn't infringe on I4i's patent, remove that feature from Word, or pursue a settlement.

Although XML technology may seem arcane, Owen said it is important technology and he said I4i is suffering each day that there is no injunction because the market is growing so quickly.

"It's not a 'would-like-to-have' (technology)," Owen said. "We believe it is a must-have going forward. This is infrastructure so that commerce and government can function and solves some of the problems that are seemingly insurmountable in managing data today."