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Office upgrade could trap many businesses

A patent setback for Microsoft means more businesses may be pushed into using tweaked Office than suggested.

Microsoft's recent warning that customers must use an updated version of Office in new installations is likely to affect a significant number of businesses, according to a study.

The software maker said last month that as the result of a patent dispute, companies will have to use tweaked versions of Office XP and Office 2003 when they install the software on new machines.

AssetMetrix said on Monday that its research shows that more than one in five corporate computers running Office use the version that Microsoft was forced to update. Of the remaining 78 percent, the majority are older versions, the Canadian asset tracking firm said. That means as companies upgrade their PCs, they will likely have to move to the specially patched versions of Office.

"If you are running Office XP or Office 2003 Professional, there is some likelihood that you are affected by this," AssetMetrix CEO Jeff Campbell said in an interview.

The issue relates to a verdict last year by a jury in Orange County, Calif., which found in favor of a patent claim by Guatemalan inventor Carlos Armando Amado. Microsoft was ordered to pay $8.9 million in damages for infringing Amado's 1994 patent.

As a result of the case, Microsoft said it was forced to change the way Microsoft's Access database interacts with its Excel spreadsheet. The company has started sending e-mails to many of its customers worldwide, telling them that all new installations of Office XP and Office 2003 have to use newly updated versions that include the change.

"It was recently decided in a court of law that certain portions of code found in Microsoft Office Professional Edition 2003, Microsoft Office Access 2003, Microsoft Office XP Professional and Microsoft Access 2002 infringe a third-party patent," Microsoft said in an e-mail to customers seen by CNET News.com. "As a result, Microsoft must make available a revised version of these products with the allegedly infringing code replaced."

Although companies are not required to go back and update already installed copies of Office, Campbell said that many companies have policies that require all machines to be on the same version.

"For many of our customers, the disparity of versions is an issue for them," he said.

Microsoft downplayed the results of the AssetMetrix study.

"The court ruling only impacts customers in the process of new installations and any future installations of the affected products," Sunny Jensen Charlebois, a senior product manager at Microsoft, said in a statement on Monday. "The AssetMetrix report and tools only focus on existing installations and are not relevant to this patent case since this requirement is for new installations, not existing ones."

Charlebois also pointed out that even if they don't update existing machines, customers are covered by the company's indemnification policy, provided they use the patched versions on new installations. That protects them from liability for using Microsoft software that might infringe on a third party's patents.

That said, Microsoft has recommended that customers do move to the newer software.

Garter analyst Michael Silver said that businesses that are using Office 2003 but not ready to move to Service Pack 2 of that program are in somewhat of a bind, given that the service pack is required for the patch.

"Installing the patches on new implementations without testing may be a quick alternative that minimizes legal risk, but risks breaking applications," Silver said in a research note to clients.

An alternative, Silver said, is to install versions of Office without the Access database, particularly for workers who are unlikely to need that program.

Silver notes that although customers don't have to update existing installations of Office, the issue is likely to crop up even at companies that are not doing new installations of Office, as they buy additional PCs or re-image broken ones. One of the challenges, Gartner said, is that for Office 2003, Microsoft has provided a new version only for Office 2003 Service Pack 2, even though many businesses are still using Service Pack 1.

"Microsoft should produce a single patch for Office 2003 SP1," Silver said in an e-mail interview. "SP1 is still supported and installing it, and a patch would be much easier for users than having to test and install a whole service pack, which is what they need to do to comply today."