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The i4i v. Microsoft Order Staying the Injunction - Updated
Friday, September 04 2009 @ 11:01 PM EDT

I have the Order [PDF] for you from the US Court of Appeals for the Federal Circuit in the i4i v. Microsoft case. Checking the docket, we see there are some other documents we haven't seen yet, and we'll try to get those next week. It's puzzling why the court makes some documents digitally available but not the briefs. For example, the Washington Legal Foundation filed an amicus brief, and i4i filed an opposition and then Microsoft replied, and we haven't seen any of that, or even heard about it. The Foundation is linked to the law firm where Bill Gates' father's used to practice law, K & L Gates LLP, before his retirement.

It's frustrating that the media tells us what is in an order, or part of what it in an order, or what the order might mean, but they don't provide the order itself or all the briefs. Please, guys, if you have the documents, send them to me if you don't want to publish yourselves. We'll gladly make them available, and you can give yourselves a head start if you wish before I publish. But this is history, and we should be documenting what is happening, don't you think? And this case can affect a lot of people, so we are naturally interested. If any journalist has any of these missing filings, please email me, to save Groklaw folks another trip on foot. I don't at all understand why neither party is making these documents more readily available.

The order itself is quite simple:

NOTE: This order is nonprecedential.








Appeal from the United States District Court for the Eastern District of
Texas in case no. 07-CV-113, Judge Leonard Davis.




Microsoft Corporation moves for a stay, pending appeal of the district court's injunction. The appellees oppose. Microsoft replies.

Without prejudicing the ultimate determination of this case by the merits panel, the court determines based upon the motion papers submitted that Microsoft has met its burden to obtain a stay of the injunction.



The motion is granted.

When it says this order is nonprecedential, it means it's not binding case law. Beyond that explanation, it gets complicated. Here's an article on the Marquette University Law School Faculty Blog that explains a bit more deeply if you wish to dig further. [ Update: Patently O explains the per curiam part:
Interestingly, the stay order indicates that it is a per curiam decision, but the order was signed by the Federal Circuit Clerk Jan Horbaly "for the court." I see this as an indication that the judges assigned to the merits panel do not yet want to reveal their identities.

The unfortunate part of this decision is that it does not define what it takes to meet the "burden to obtain a stay of the injunction" - especially in the wake of eBay. How does the court go about deciding whether to stay relief? How important is the fact that briefing of the merits are being expedited? What role did the amicus briefs by HP and Dell play in the decision?

- End update.]

And when it says this stay doesn't prejudice the ultimate determination, it means this is just a stay, not a ruling on who should ultimately prevail. There will be a hearing later this month, on the 23rd, so this isn't to be taken as a clue as to any outcome one way or another. If you recall the timing in the SCO v. Novell appeal, you can get an idea of the timing here. Microsoft gets a stay, but because it asked for and got an expedited hearing, it may not be much of one. The drop dead date was October 10. If it wins on appeal, there is no injunction. But if it loses, it all could happen almost on the original schedule, maybe a couple of months longer, depending on how fast the court issues its ruling.

I wish all software patents would go away. Microsoft can afford this. Another Linus writing FOSS code in a university somewhere can't. And that's part of what's wrong with software patents. They do not help FOSS. They get in the way, and they ensure that only the big boys can play the patent game. If you want software only from large vendors, great. But if you want another Linux, you need to think about all this.

Microsoft doesn't want another Linux, of course. It hates the first one. But what about you?

Here's the entry on the amicus brief from the Washington Legal Foundation from the docket for you:

9/3/2009 Brief of Washington Legal Foundation as Amicus Curiae In Support of Defendant-Appellant Supporting Reversal . BY Washington Legal Foundation (Amicus ). SERVED BY Mail ON 9/3/2009. FILED ON 9/3/2009 . (NON-CONFIDENTIAL)
Here's who that is, according to SourceWatch. If I have understood that page, they fight against legal activism by means of legal activism:
The Washington Legal Foundation (WLF) was established in 1977 to "fight activist lawyers, regulators, and intrusive government agencies at the federal and state levels, in the courts and regulatory agencies across the country"....

The foundation states that it has "one goal" which is: "to defend and promote the principles of freedom and justice." Since it was founded 25 years ago, WLF has developed into the nation's preeminent center for public interest law, advocating free-enterprise principles, responsible government, property rights, a strong national security and defense, and balanced civil and criminal justice system.

WLF is a unique institution with three essential cornerstone programs:

* shaping public policy through aggressive litigation and advocacy
* publishing timely legal studies
* educating policy-makers and the public through extensive communications outreach
[...] With this unique approach, litigating precedent-setting issues in the courts and before government agencies, publishing and marketing timely and relevant legal studies, and ensuring maximum exposure for its work with policy-makers and the media, the Washington Legal Foundation is able to shape public policy and work with allies in government and our legal system to strengthen America's free enterprise system."
I wish they'd do something about the USPTO and software patents. I know. That would perhaps be a new thought to them, but the truth is, software patents are doing real harm to free enterprise, particularly to Free and Open Source software, and this case is an obvious proof of the harm that software patents can cause. The head of the Foundation has submitted a pro hac vice application to the court. So this case gets bigger and bigger in its implications. It's Washington as in DC, by the way, not as in the state. And they are filing in support of Microsoft, which will not surprise you. On the page I linked to about the law firm, it says this:
"This dynamic organization is a prominent force in both judicial and regulatory arenas, promoting economic growth and allowing free enterprise to prosper. If you share my beliefs that our country’s ability to compete in the world economy should not be hindered by excessive regulation and unreasonable court decisions, I encourage you to join WLF in defending free enterprise."

The Honorable Dick Thornburgh
K&L Gates LLP
Chairman, WLF Legal Policy Advisory Board

I wonder if the situation was reversed who they would support? If i4i had been found guilty of infringing Microsoft's patent, then would they file an amicus brief in support of an i4i motion to stay an injunction?

And look at this entry:

9/3/2009 MOTION: Entry 40 :by Appellee - Motion to replace Confidential documents. SERVICE : by Hand on 9/3/2009
ACTION: Entry 42 :Granted. The previously filed documents will be destroyed by the Clerk's office. Filed: 9/3/2009
Already? Microsoft is like the Lone Ranger. In it rides, does its thing on the docket, and disappears it all without a trace. Who was that masked man?

Kidding. I believe in confidentiality, as you know, but Microsoft is by far the most secretive litigant I've ever seen. Remember Canopy destroying Microsoft documents and turning them into toilet paper? And I can't help but wonder if that is why it's so hard to get the documents digitally in this case. It certainly feels like things are happening in the dark, behind closed doors.

Meanwhile, with all the big guns marching on to Microsoft's battleship and reporting for duty, what about i4i? Isn't patent law supposed to work for you, no matter whether you are big or small? I wonder what they are thinking? The Globe and Mail's Simon Avery found out:

Loudon Owen, chairman of i4i, said he remains confident that the appeals court will uphold last month's decision of the U.S. District Court for the Eastern District of Texas. “Microsoft's scare tactics about the consequences of the injunction cannot shield it from the imminent review of the case by the Federal Circuit Court of Appeal,” he said....

“To paraphrase the great heavyweight boxing champion Joe Louis, ‘They can run, but they can't hide.' Microsoft's time will eventually run out,” said Mr. Owen, who is also chairman of The Fight Network and a former Ontario College boxing champion as well as an expert in Brazilian jiu jitsu.

I'm finding you have to read Canadian press to get much of i4i's side of the story, which could be an indication of the disparity in funding for things like PR, and the court isn't helping by forcing us to do some jiu jitsu ourselves even to follow along with the appeal.

Update: The Washington Legal Foundation has made its amicus brief available here [PDF]. The brief addresses not the question of whether Microsoft is liable for patent infringement, but only the remedies.

It feels the damages awarded are excessive, the experts for i4i were "unreliable" in that the method of calculating damages was not based on solid evidence, and the jury shouldn't have been allowed to hear that testimony, and the $40 million in enhanced damages was improper, in that the court "ignored" Microsoft defenses.

As for the injunctive relief, it argues that it is "unsound":

The Supreme Court has made abundantly clear that injunctive relief is an "extraordinary remedy" that does not follow as a matter of course to a prevailing plaintiff, Winter v. Natural Res. Def. Council, Inc., 129 S. Ct. 365, 375-76 (2008), and that traditional equitable standards apply "in patent damages no less than in other cases". eBay, Inc. v. MercExchange, L.L.C. 547 U.S. 388, 394 (2006). Yet, the district court here paid only lip service to these controlling principles, and instead rooted its injunction in overbroad presumptions that are irreconcilable with Winter and eBay.
It also argues that in close cases, where there are many defenses presented, a finding of wilfullness is inappropriate. In close cases, the party found to infringe may legitimately have viewed that it was not infringing, as opposed to recklessly going forward with knowledge of infringement. The problem with that, as we've seen in a number of the cases we followed here on Groklaw, is that with a lot of money comes lawyers, who can argue most fervently the most absolutely ridiculous claims and defenses which are sometimes even successful although they shouldn't be, so I don't know if that makes for a good way to measure.

It also feels that the court erred in viewing i4i and Microsoft as being in competition:

It is more than passing strange to think of Word as being in competition with a software add-on that functions as a tiny component of Word and that most users do not even know exists, let alone have any idea how to use.
Hmm. If so, why can't Microsoft just get rid of it? It argued very differently about customXML's importance during Microsoft's effort to get OOXML accepted as a standard. And while currently i4i sells an add-on product, when this all began, it was not. It was selling a product Microsoft recommended until they more or less put i4i out of that business, or at least that's how I recall the judge's order. So, if you put someone out of business, then can you benefit from the altered state of your vanquished competition and argue that because you've left them gasping on their backs on the field, now they are not competitors and so they shouldn't get an injunction? Mighty cold.

On the excessive damages awarded, in the Foundation's view, it writes:

As the Supreme Court has explained, excessive damages awards raise constitutional concerns. See, e.g., State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003); BMW of N. Am. Inc. v. Gore, 517 U.S. (1996). Due Process principles "prohibit [] the imposition of grossly excessive or arbitrary" awards..."
Say, send a memo to the RIAA, please. Did the Washington Legal Foundation submit an amicus brief in Tenenbaum or the Jammie Thomas' cases? No? I believe this is exactly the argument that will show up in the Tenenbaum appeal, so it's not too late.

Then, the Foundation argues that the district court followed a cramped concept of the public interest. Health and safety are not the only issues; the courts should also think about customers and other businesses that would be affected. Hence Dell and HP show up saying they will be affected by this tiny component of Word that is so insignificant that Microsoft and they can't possibly remove it in time to abide by the injunction?

The district court here, however, ignored much of the public impact of forcing a redesign of Word. Although the court asserted that the injunction would have little effect on "current customers," the opinion is silent regarding the potential impact on future customers. A57. The court acknowledged that the task of reissuing Word without the infringing component would be "enormous," but said nothing about what this may mean for those who would like to purchase Word before Microsoft is able to complete the Herculean task.
Well, customers have no legal right to infringe i4i's patents either, last I looked, so any inconvenience stems from buying products that infringe or from distributing same. And I believe Dell and HP said they'd need 120 days.

It may be Herculean to remove that "tiny component" but clearly they didn't think it would take forever.

Finally, the Foundation argues that just because Microsoft is rich and i4i is not, the court shouldn't give that undue weight in balancing the hardships. It might be appropriate sometimes, but this court "abused its discretion by resorting to a David-and-Goliath caricature while failing to take meaningful account of the extraordinary burdens that its sweeping injunction would impose on Microsoft..."

By then my lip was curling just a bit. What the Foundation would like the court to do is reverse the damages award and the permanent injunction, and "remand for further proceedings on an appropriate remedy".

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