Monday, August 24, 2009 1:08:12 PM
It's premature to conclude that Microsoft has "dragged" out anything yet. Microsoft's emergency appeal as to the Word injunction may well fall on deaf ears. Though complying with the Court's Order and halting sales of Word (until it stops infringing on i4i's patents) may be devastatingly disruptive or even cause irreparable harm to Microsoft's business, Microsoft was found by a jury to have infringed. Courts typically are very reluctant to interfere with a jury's decision.
And, Microsoft can't just stomp its feet, hold its breath, and get its way merely because it wants to continue stealing another company's intellectual properties. Courts won't let Microsoft continue to steal and violate the law simply because it might be terribly inconvenient or financially disruptive, especially where in the i4i case, the facts were clear that i4i went to MSFT first and that Microsoft rejected i4i's patents and then promptly stole them. What MSFT did in the i4i case was pretty outrageous, imho.
Microsoft has another very simple remedy that it, itself, controls, and one which it seems unwilling to consider. It can simply license the patents from i4i, on reasonable terms - which is all i4i ever asked Microsoft to do. Instead, MSFT led with its chin, as it always does, and tried to wear out tiny i4i through lengthy litigation. MSFT's strategy blew up in its face this time. Indeed, MSFT's lawyers were reprimanded for their misconduct. Looks like it may be time for MSFT to engage a new strategy or a new team of lawyers.
True, a MSFT appeal may delay the payment of the $290 million judgment, but what is more deadly is the injunction imposed by Judge Davis. If the appeals court does not stay or lift the injunction, pending Microsoft's appeal, then you won't see the i4i case drag on much longer. There will, instead, be a quick settlement, imho.
As to VirnetX's case, one major problem Microsoft faces here is the largest financial exposure ever encountered ($6 to $12+ billion) by MSFT in a patent-infringement case which they will have to place in the hands of a highly unpredictable jury and in a venue known to be plaintiff's oriented. (Obviously, the jury didn't care for MSFT in May of 2009, in when it rendered a $200 million verdict against MSFT.) Another major problem is that VHC's patents are involved in all of MSFT's core products and its Windows operating systems - - not just Word. MSFT risks having Judge Davis also enter an injunction to stop infringing on VHC's patents within 60 days too. Talk about disruptive or irreparable harm! Halting the sales of Word pales in comparison as to the irreparable harm MSFT will experience if an injunction is granted against it by Judge Davis in the VHC case. Nonetheless, a showing of irreparable harm in no way excuses or justifies MSFT's stealing another company's intellectual property/patents and will not save them.
Finally, if the Court of Appeals refuses to stay Judge Davis' injunction as to Word, then that's a pretty good indicator that it won't reverse or stay any injunction Judge Davis might be inclined to enter against MSFT as it relates to VirnetX's patents at issue - - - yet another reason MSFT would be well served to settle with VHC while it can and before some other major technology company decides it must have VHC's patented security technologies and beats MSFT to the punch.
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