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Microsoft Trial Misconduct Cost $40 Million

SpuriousLogic writes "The judge who banned Microsoft from selling its Word document program in the US due to a patent violation tacked an additional $40 million onto a jury's $200 million verdict because the software maker's lawyers engaged in trial misconduct, court records reveal. In a written ruling, Judge Leonard Davis, of US District Court for Eastern Texas, chastised Microsoft's attorneys for repeatedly misrepresenting the law in presentations to jurors.'Throughout the course of trial Microsoft's trial counsel persisted in arguing that it was somehow improper for a non-practicing patent owner to sue for money damages,' Davis wrote. The judge cited a particular incident in which a Microsoft lawyer compared plaintiff i4i, Inc. to banks that sought bailout money from the federal government under the Troubled Asset Relief Program. 'He further persisted in improperly trying to equate i4i's infringement case with the current national banking crisis implying that i4i was a banker seeking a "bailout,"' Davis said."

30 of 231 comments (clear)

  1. MvP by Anonymous Coward · · Score: 5, Funny

    Microsoft... vs... patent trolls.. who do I hate??

    1. Re:MvP by moon3 · · Score: 4, Funny

      Tough call, as it is Alien vs Predator kind of fight.

    2. Re:MvP by johannesg · · Score: 4, Funny

      Microsoft... vs... patent trolls.. who do I hate??

      You are perfectly within your rights to hate both. Doing so has the great advantage that you really don't need to aim carefully, should you decide to be sure from orbit...

    3. Re:MvP by Anonymous Coward · · Score: 5, Informative

      While I don't like software patents, I think i4i are not really patent trolls. From what I've read, they actually have a product that plugs into MS Word that does what their patent says it does. So it's not like they applied for a patent and sat around waiting for everyone to adopt XML. i4i have a product, they patented the "technology," and Microsoft simply implemented the same functionality which threaten their product. Like all great American companies, i4i sued.

    4. Re:MvP by s73v3r · · Score: 4, Informative

      If you were trying to sue someone for violating your patent, where would you rather do it: A jurisdiction very friendly to patents, or one that is hostile to patents?

  2. Damnit! I'm torn! by erroneus · · Score: 4, Insightful

    On one hand, it's fun to see Microsoft getting punished, on the other, I happen to agree with Microsoft's argument with regard to patent trolls.

    I think Microsoft might have made out better this way anyway. Arguing to invalidate the patent could have hurt them and their practice of patent filing and arguing Bilski could have really blown the lid off of things. In short, they more or less had to defend "software patents" while at the same time finding a legal argument against the plaintiff.

    1. Re:Damnit! I'm torn! by morgan_greywolf · · Score: 4, Interesting

      I happen to agree with Microsoft's argument with regard to patent trolls.

      Which part? Equating the patent troll i4i with a banker looking for TARP bailout money sounds a lot like a Wookie Defense to me. It seem that Microsoft's attorneys should have simply stuck with the facts at hand. Does i4i have an implementation of their patent? Have they ever? And, most importantly, was their patent sufficiently obvious to someone skilled in the art? Remember, the USPTO doesn't have the final say in whether or not a patent is enforceable. The courts, however, do.

      MIcrosoft's attorneys need to stop playing silly games and start litigating their case.

    2. Re:Damnit! I'm torn! by pjt33 · · Score: 4, Interesting

      The thing which surprises me is that the story doesn't say anything about a direct punishment of the lawyers. It seems like a straightforward case of contempt of court.

    3. Re:Damnit! I'm torn! by noundi · · Score: 5, Interesting

      Does i4i have an implementation of their patent?

      This seems to be a product which is related to this patent. I don't know, slashdotters seem to be very quick to judge on the behalf of MS, claiming that i4i are patent trolls. I haven't seen any proof that they are, and until I do I'll consider this suit valid. Ironically those just spewing the phrase "patent troll" without providing any proof nor data are what? That's right -- trolls themselves.

      --
      I am the lawn!
    4. Re:Damnit! I'm torn! by pjt33 · · Score: 5, Informative

      I RTFA (sorry, I know I shouldn't) before making the comment about contempt of court. The summary is roughly a duplicate of the first half of TFA, but the telling phrase is in the second half:

      "All these arguments were persistent, legally improper, and in direct violation of the Court's instructions," Davis said.

      Directly violating a court's instructions is generally contempt.

    5. Re:Damnit! I'm torn! by KillerBob · · Score: 5, Interesting

      I will not feed the trolls... but... it's like a train wreck...

      Even its "product" is just some crapware which plugs into word and it's suspect that there is even a product, it looks like they made that page simply for the court case.

      Just because you wouldn't use the product doesn't mean that it doesn't exist. You can call it Crapware all you like, but if they were making money off it, then that's all that matters. They were granted a patent on it, then Microsoft chose to implement it natively into Word, which invalidated their product. They did this without paying for the privileges. My guess is that some MS developper took it as a given that this was a good idea, and threw it into Word. The execs liked it, and they didn't bother to research whether there was competition or a patent on it.

      If you were a developper on some widget for a program, you'd patented the methods and technology, and were making your livelihood off it, you'd be screaming bloody murder. The damages are a little excessive, but this is a company that's been put out of business by a developper with significantly more resources available to them deciding to ignore its patents. That's kind of why patents exist in the first place.

      --
      If you believe everything you read, you'd better not read. - Japanese proverb
    6. Re:Damnit! I'm torn! by wbren · · Score: 4, Informative

      I find it ironic that product is designed to work with Word. I can see why they would want to sue though, seeing as how MS just bundled in software that removes the need for their add on.

      The problem isn't that Microsoft bundled technology into Word. The problem is that i4i had a patent on said technology, and that Microsoft knew about the patent before deciding to "make it obsolete."

      From what I've read, the patent is on something which strips the raw text from the surrounding tags -- meaning I can call "open" on a file stream in C++, read in the data as a string, all without worrying about the tags (because the tags are logically separated already in a different location.)

      I suggest reading the entire patent before trying to summarize. It's significantly more complex than what you described.

      Eitherway, I'm not a fan of copyright, no matter who's getting f'd'n'the'a.

      We're talking about patents, not copyrights. There's a big difference.

      --
      -William Brendel
    7. Re:Damnit! I'm torn! by Zordak · · Score: 5, Insightful

      It's willful infringement, which means they were fully aware of the patent and decided to do it anyway. Before we just dismiss i4i as trolls, maybe we could consider the possibility that they did something innovative and Microsoft flagrantly ripped it off, giving them the finger and saying, "If you don't like it, we'll see you in court." Maybe you don't like software patents, but they are the law. i4i layed down a lot of money to get a patent issued because the current state of the law made that patent valuable. Seriously, everybody on /. seems to assume that every single patent infringement lawsuit is a "patent troll." But patent law is a lot more complicated than that. And I imagine that about nine out of ten people here would have the exact same reaction if Microsoft ripped off their product: let's sue.

      --

      Today's Sesame Street was brought to you by the number e.
  3. Dumb law, dumber jury and dumbest lawyers by 140Mandak262Jamuna · · Score: 4, Insightful

    Instead of trying to educate the jury that the whole point of "Extensible" markup language is to extend and customize the files the lawyers were pulling stunts. In the tragedy of errors, I cant decide who to root for.

    --
    sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
    1. Re:Dumb law, dumber jury and dumbest lawyers by __aagmrb7289 · · Score: 4, Insightful

      I have a suggestion - try rooting for the side that is RIGHT. Instead of who you "like better" or "hate a little less." Trust me - the world would be a better place if we could all pull that off.

  4. Anyone got a PACER account? by H4x0r+Jim+Duggan · · Score: 5, Interesting

    If we could see the court transcript, we'd have more info about why MS were fined x, y, z.

    If someone has a PACER account, they could put the transcript on archive.org simply with the RECAP plugin:

    * https://www.recapthelaw.org/

    And then we could have a more complete picture on http://en.swpat.org/wiki/I4i_v._Microsoft

  5. Re:Fol de Rol by miffo.swe · · Score: 5, Informative

    Its just that this company isnt a patent troll. Its a former close partner to Microsoft.

    --
    HTTP/1.1 400
  6. Why are American Judges demanding so much money? by Anonymous Coward · · Score: 5, Insightful

    $2 million for mp3s, $40 million for a bad argument.

    Do these judges send a $10 million bill to toilet paper companies when they have to wipe their backside?

  7. What the transcript could tell us by H4x0r+Jim+Duggan · · Score: 4, Informative

    If we had the transcript, maybe we could see:

    • Did the judge understand the patent?
    • How did the judge interpret each concept?
    • What misconduct did the judge see?
    • Is the exclusion of future products that remove meta data there because the patent doesn't cover that or because the judge wants to give MS a path to avoid future infringement?
    • Any hints at what MS's possible grounds for further appeal are?

    The court transcript, even though it's a public domain document, is only provided to people by the court if they make an account and pay 8c per page. Once you have the page, since it's public domain, you can post it anywhere. RECAP is a Firefox or IceCat plugin that can automatically post those public domain transcripts to archive.org so that we can all read them and link to them, and that would help with documenting case law in the USA on swpat.org, among other things.

  8. Re:Fol de Rol by Anonymous Coward · · Score: 5, Informative

    http://www.theglobeandmail.com/news/national/the-biblical-vengeance-of-i4i/article1253054/

    Six years ago, an unusual and powerful alliance approached a tiny Toronto software company with a fateful proposition. Microsoft was helping U.S. intelligence sift through relentless mountains of documents relating to the 9/11 terrorist attacks but had few means to sort them out. This firm, i4i, had the software that could intuit crucial, revelatory patterns that its own software could not.

    It wasn't long before Microsoft recognized the value of the firm's technology, and, as it is now famously alleged, pinched it.

  9. Re:Fol de Rol by Pieroxy · · Score: 4, Insightful

    the law is on their side

    Extending the "Extensible markup language" seems like a no-brainer. It is in the name of XML!!! And I thought patents had to be non obvious !

    Not really sure on which side the law is on that one. That said, explaining this to a judge might prove to be a complex situation.

  10. Re:First post? by electrofelix · · Score: 5, Informative

    Guessing you missed fact that the company had a product which was rendered obsolete when Microsoft included the product capabilities into Word.

  11. ODF is immune? According to Groklaw? by 140Mandak262Jamuna · · Score: 5, Informative
    First off, I am no lawyer. My understanding of Groklaw suggests that ODF would immune to this patent.

    The relevant passage:

    "Custom XML" refers to content within the file that is of a different XML format, with a separate "custom schema" to describe that content. The problem with such content is that there is no way for a standard to describe how such data should be interpreted, as it is by definition in a "custom format" and can be any kind of data. That is why "custom XML" is not allowed in ODF documents, and that is one of the reasons why OOXML is such a miserable standard.

    And this

    Interesting, no? There's one more headline, but only to debunk, Matt Asay's Microsoft's 'Custom XML' patent suit could put ODF at risk. Actually, it doesn't, so far as I know. Custom XML was one of the reasons ODF folks thought the OOXML "standard" was crudely designed, and that it had no place in a standard. It was a big discussion, and basically, to the extent I understood it, the issue was this: that it was a short cut on Microsoft's part, so it wouldn't have to do things in the usual standard way but could just keep things as they were, dumping a lot of processing stuff into the format, where, ODF folks said, it didn't belong. The very name should tell you why.

    --
    sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
  12. Re:Why are American Judges demanding so much money by gnasher719 · · Score: 4, Insightful

    I don't have points to mod you up, but the judges do need to have their heads and their asses examined.

    In this case, I completely disagree.

    Microsoft made the argument that a company having a patent but not producing anything shouldn't be able to ask for monetary damages. That is wrong. I can make an invention even though I know clearly that I don't have the money, talent and intention to turn this into a product that can be sold at profit. If I am better at inventing than at marketing it would be ideal to invent things and sell those inventions to others who are better at marketing. The fact that Microsoft uses the invention proves that it is worth money and that damages should be paid.

    This is of course completely independent of the question whether the patent should be invalidated, or whether Microsoft is infringing on the patent. It is quite possible that a court outside Texas would have judged in favor of Microsoft, and stupid software patents should be (but are not) invalid, whether they are owned by Microsoft or used to extract money from Microsoft. But that wasn't what the judge complained about: He complained that Microsoft repeatedly told the jury to not award damages for reasons that were not in agreement with the law.

    And since they tried to influence a court decision that was about $200 million, making them pay 20 percent for trying to convince the jury to do something that is clearly wrong seems fine.

  13. Re:Penalize client? by gnasher719 · · Score: 4, Informative

    I don't know a lot about the intricacies of the legal system, but why is the client penalized for the behavior or mistakes of the attorney? Does the client dictate or approve every word that comes out of the attorneys mouth in court? If the attorney used misleading wording then shouldn't the attorney be censured or fined and not have that penalty included in the actual judgment?

    It happens because it is the client who hired the lawyer. If you do something wrong while acting for your company, the company will quite likely be held responsible for what you do. Same with the lawyer. There is always the possibility to sue your lawyers in a situation like this, if you think that they were reckless or guilty for you losing the money. Let's say if your lawyer appears in court drunk and you lose the case because of that, you might very well have grounds to sue.

  14. Whoever wins... by Anonymous Coward · · Score: 5, Insightful

    We lose.

  15. Re:Penalize client? by Scrameustache · · Score: 4, Interesting

    why is the client penalized for the behavior or mistakes of the attorney?

    Why is the client rewarded for the behavior or successes of the attorney?

    --

    You can't take the sky from me...

  16. Lawyers? Punished? Hahahahah by gavron · · Score: 5, Interesting
    You're surprised the lawyers didn't get punished? Sir, perhaps I can point you to www.groklaw.net. SCO has been pushing outside the envelope of ethical litigation since 2003. That's SIX YEARS of doing it. They have received no sanctions, endless do-overs, and are now in a trustee Chapter-11 (instead of Chapter 7) bankruptcy.

    CLEARLY lawyers not only DO NOT get punished, but are REWARDED for behaving in this manner.

    The good guys (that would be us the humans, as well as the named other parties in the cases) all lose, and the unethical lawyers win.

    Cheers,

    Ehud

  17. Re:First post? by Sj0 · · Score: 4, Insightful

    It's not the job of judges to determine the value of a law, only to interpret them.

    Patent law doesn't say you have to be using the patented device to sue. It never even hints at it. The judge has no authority to make it say that. Microsoft was fined for pretending the law does say or hint at that.

    --
    It's been a long time.
  18. Re:First post? by PitaBred · · Score: 5, Funny

    Ahhh. So the charges are "felony interference with a business model". Got it.