In what could be a financial crisis for Microsoft, a Texas U.S. District Court judge has ordered that Microsoft cease distribution of MS Word in The U.S. A juror has also found Microsoft guilty of willful infringement of a patent held by a Toronto, Canada company known as i4i Inc. In addition Microsoft was fined $200 million dollars and with interest the award was grown to $290 million dollars.

According the the PR Newswire For Journalists it also states the following information:

The Order and Permanent Injunction were signed today by Judge Leonard Davis of the U.S. District Court for the Eastern District of Texas, Tyler Division. Today’s ruling follows a May 20, 2009, verdict of $200 million after jurors found that Redmond, Wash.-based Microsoft willfully infringed an i4i patent covering a document system that relies on the XML custom formatting function.

During the trial, attorneys from McKool Smith and Tyler, Texas-based Parker, Bunt & Ainsworth successfully argued that Microsoft infringed the i4i patent issued in 1998, U.S. Patent No. 5,787,499, which covers software designed to manipulate “document architecture and content.” The software covered by the patent removed the need for individual, manually embedded command codes to control text formatting in electronic documents.

The McKool Smith team representing i4i includes firm principals Douglas Cawley, Gordon White, Jeff Carter, Kevin Burgess, Rosemary Snider, Jill Lynch, and Randy Carter, senior counsel Tom Fasone, of counsel, Alfredo Silva, and associates Sarah Anderson, John Campbell, Austin Curry, Gretchen Harting, Jennifer Henry, Craig Donahue, Martin Robson, and Jonathan Yim. Robert M. Parker from Parker, Bunt & Ainsworth also represented i4i as co-counsel.

In today’s order, Judge Davis ruled that Microsoft should pay i4i an additional $40 million for its willful infringement of the i4i patent. Microsoft also was ordered to pay slightly more than $37 million in prejudgment interest, including an additional $21,102 per day until a final judgment is reached in the case. The court also ordered Microsoft to pay $144,060 per day until the date of final judgment for post-verdict damages. Today’s permanent injunction prohibits Microsoft from selling or importing to the United States any Microsoft Word products that have the capability of opening .XML, .DOCX or DOCM files (XML files) containing custom XML. The court is requiring Microsoft to comply with the injunction within 60 days.

I am sure Microsoft will appeal this decision and that the company will eventually be able to distribute MS Word once again. But in the mean time this will put a dent in the sales of MS Word and MS Office which includes the Word product.

Comments welcome.

Source – registration required