Patents Post Grant Blog

 

The Impact of the Pending Reexamination on i4i Limited Partnership v. Microsoft (E.D. Tx)

i4i filed suit against Microsoft back in March of 2007 in Texas for infringing U.S. Patent 5,787,449, relating to certain XML data structures.  Faced with an injunction at the conclusion of trial in August of 2009, Microsoft was granted an emergency stay pending the further review of the Federal Circuit.  As widely reported yesterday, the Federal Circuit has refused to overturn the injunction threatening the continued sale of Microsoft Word®, now scheduled to go into effect on January 11, 2010.

While Microsoft may have a few appellate tricks up their sleeve to perhaps stave of the injunction a bit longer, it appears  that the game is all but over.

But what of the pending reexamination of the i4i Patent ordered at the USPTO?

In what appears to have been largely an afterthought, a reexamination request was filed in November 2008.  The request was granted in early 2009, the reexamination is currently ongoing as ex parte Control No 90/010,347.  Curiously, despite the fact that the suit was initiated in early 2007, a reexamination was not filed until some 20 months later.  In Texas, stays are not as commonly granted for patent reexaminations, certainly not to the extent of some of the more extreme districts.  As such, it appears as though the defendants, Microsoft included, chose to follow a more traditional litigation path.

Based upon the briefing, it appears as though the late filing of the reexamination request was primarily to stave of a finding of willful infringement.[1]  The thinking being that the granted reexamination would tend to support that Microsoft had a good faith belief of non-infringement and, thus, could not have been acting in an objectively unreasonable manner.[2] 

Since that time, the USPTO has handled the reexamination in relatively quick fashion, issuing a non-final rejection in June of 2009. A response was filed by i4i on September 15, 2009.  As noted in MPEP 2271, any second action in reexamination is intended to be a final rejection.  Thus one would expect that unless the reexamination is favorably terminated in i4i’s favor, a Final Action is imminent. 

Assuming a Final Action is mailed, and hindsight being 20/20, one is left to wonder how a Final Action or pending appeal would have impacted the current state of affairs.  In other words what if Microsoft had not waited 20 months to pursue a concurrent reexamination? 

At best, it is fair to assume that the negotiation position of Microsoft would have been greatly improved prior to trial.  Moreover, if the reexamination had been initiated in a timely manner, an adverse decision of the USPTO could have potentially reached the Federal Circuit in time to end the dispute outright.  In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007).  At worst, assuming the reexam was favorably terminated in favor of i4i, Microsoft would have been in a difficult situation, basically, where things stand now.  One is only left to speculate if Microsoft much if anything to lose by filing earlier, and what they have lost as a result of waiting. 

Meanwhile the folks at i4i have their stockings all hung by the chimney with care that the hope of  $98 per infringing sale soon will be there.

On behalf of PatentsPostGrant.com, Happy Christmas to all, and to all a good night.         

 

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[1] See 2009 U.S. Fed. Cir. Briefs 1504

[2] See TGIP, Inc. v. AT&T Corp., 527 F.Supp.2d 561, 579 (E.D. Tex. 2007).