I4i, which mainly makes software for drug and defense companies, obtained the patent for a 'customized XML' tool in 1998. XML is a specialized alphabet that can capture any kind of computer file as a regular text.
Microsoft started using XML as an alternative way to save Word files in Word 2003 and made it the default format for all Office files in Office 2007.
This made it easier for Microsoft and its partners to create programs such as accounting software that generates reports in Word formats, says Rob Helm, analyst at research firm Directions on Microsoft.
I4i sued Microsoft in 2007, claiming that Word uses the patented process. Now, 'Microsoft is behind the eight ball and has 60 days to see if it can get the federal appeals court to stay the injunction,' says Henry Sneath, a Pittsburgh intellectual property lawyer.
No one expects Microsoft to actually pull Word off the market. It's a big company with deep pockets that has faced many legal challenges over the years. It could win the appeal, settle with i4i, or even buy out the company.
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