Microsoft denied court review in $290 million i4i lawsuit

A federal court Thursday denied Microsoft's request for a review of a lawsuit with software company i4i in which Microsoft was ordered to pay $290 million in damages and make changes to Microsoft Word.

Toronto-based i4i sued Microsoft for infringing on its patent with an XML editing feature in Microsoft Word.

A federal jury in Texas found in May that Redmond-based Microsoft had infringed on i4i's patent and awarded i4i $200 million. Judge Leonard Davis in the U.S. District Court for the Eastern District of Texas affirmed the decision in the case in August, and increased the damage award to $290 million.

Microsoft appealed to the U.S. federal Court of Appeals, and a three-judge panel denied the appeal in December. The company called the damage award the largest ever sustained in an appeal of a patent case.

In January, Microsoft removed the feature from Word to comply with a court injunction. The company also requested an en banc review, which would have involved an 11-judge panel at the U.S. Court of Appeals for the Federal Circuit.

On Thursday, the appeals court denied Microsoft's request.

Kevin Kutz, a Microsoft spokesman, released a statement saying: "We're disappointed with the decision. As far as next steps, we continue to believe there are important matters of patent law that still need to be properly addressed, and we are considering our options for going forward."

Microsoft could continue to pursue a review, drop the matter and eventually pay the damages, or appeal to the U.S. Supreme Court. Microsoft has also asked the U.S. Patent Office to re-examine i4i's patent, which is pending.

The chairman of i4i, Loudon Owen, said he's "very, very pleased" by the court's decision.

"I just think it is important in the world of smaller companies and inventors to know you can go to court, and you can have your property protected and have your fair day in court," he said. "You can now compete on a level playing field."

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com