t minus 50: Microsoft Requests Emergency Stay of Injunctive Relief

i4i Ltd. v. Microsoft Corp. (Fed. Cir. 2009)

On August 11, 2009, Judge Davis (E.D.Tex.) issued his final order in the i4i v. Microsoft patent litigation. That final order gives Microsoft 60 days to stop selling, using, or supporting infringing versions of MS Word. By my calendar, the injunction becomes effective October 10, 2009. I4i’s patent covers xml capabilities of the MS Word that were implemented in Office ’03 and ’07. At this point, it is unclear how difficult it would be for Microsoft to eliminate the adjudged infringing capability from its products.

Microsoft has already filed a motion with the Court of Appeals for the Federal Circuit demanding an emergency stay pending appeal. The Federal Circuit clerk immediately denied Microsoft’s motion for an “administrative stay.” Instead, a merits panel will consider the emergency motion at oral arguments calendared for a special session September 23, 2009. Microsoft’s brief-on-point is due August 25; i4i’s opposition is due September 8; and any reply is due September 14. If the Federal Circuit makes a decision quickly, Microsoft may have time to appeal directly to the Supreme Court for a midnight stay of execution.

The jurisprudence on stays pending appeal is somewhat lacking – largely because these cases are – by definition – decided in a rush and courts often do not have time to fully explain their decisions. Based on the lower court decision, Microsoft’s best arguments for a stay will be based on a combination of (1) its argument on claim construction; (2) the irreparable harm to Microsoft and its customers that would flow from the injunction; and (3) the relatively small amount of irreparable harm that i4i will feel during the few months while the appeal is pending.

Stay of Injunctive Relief Pending Appeal: Unless otherwise ordered by the court, a permanent injunction is not stayed during an appeal. In Hilton v. Braunskill, 481 U.S. 770 (1987), the Supreme Court outlined a four factor test used when determining whether to stay enforcement. The factors are essentially the converse of those used in determining whether to grant a preliminary injunction. These factors include: “(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits [of the appeal]; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.”

Patent Reform on this Issue: In 2006, patent reform legislation introduced in Congress would have added an automatic stay of permanent injunctions after a showing that “the stay would not result in irreparable harm to the owner of the patent and that the balance of hardships from the stay does not favor the owner of the patent.” Patents Depend on Quality Act of 2006, H.R. 5096, 109th Cong. §8 (2006) (proposing to amend 35 U.S.C. 283).

Notes:

  • Don Dunner (Finnegan) is representing i4i on appeal; Matthew Powers (Weil) appears to continue to lead the team for Microsoft.
  • The ABA Journal has an interesting discussion of the trial that focuses primarily on Microsoft’s attempts to paint i4i as a troll seeking a ‘bailout.’ [Link] [Seattle PI]
  • Prior Patently-O post on District Court Order.

15 thoughts on “t minus 50: Microsoft Requests Emergency Stay of Injunctive Relief

  1. Practitioner, you are starting to sound like that fellow Blimpy who couldn’t handle Mooney. Probably went off the deep end, potentially with a case of reverse schizophrenia. Dear Blimpy, he became what he despised, RIP.

  2. Objection to the use of the word beginning with “test” on this fine and upstanding virtuous place known as PO. Delete that comment and ban the poster, thx.

    He crossed my imaginary line wah wah wah.

    Just kidding, but you get the point.

  3. Not sure what a legitimate question has to do with clutching pearls sleazebag, er, Mooney.

    All of the little old ladies with Microsoft stock sure must have been clutching their pearls when this verdict came out.

    When you clutch the shriveled remnants of your testicles, do you feel anything Mooney?

    Sleazy, party of one your table is ready, Mooney, party of one, your table is ready.

  4. Practitioner seems to be unfamiliar with the concept of a jury trial. If you’ve ever been to one involving patents, you might notice that in addition to validity and infringement, competing narratives are often part of the presentation to the jury.

    People who go after well-known giants like tell the jury about the big insidious corporation who wants to steal inventions from the little guy without paying for them. The little guy invariably works out of a garage, has a brilliant idea and dream, takes both to the PTO and then tries to share his brilliant vision with corporate America, only to have his dreams crushed and his invention stolen.

    The competing narrative is… the plaintiff is either dishonest or delusional and looking to make a quick buck. Defendant invested lots of time and energy into making something that everyone uses in their daily lives, and the plaintiff sat back in the shadows for years, waited until defendant made its money, and then popped up with a piece of paper and some lawyers in search of a payday. The plaintiff’s invention isn’t very substantial, and it’s probably obvious. He just wrote down some things that industry had been doing for years, forced it through the patent office, and now he wants the jury to convert that piece of paper into a meal ticket, at the expense of upstanding, useful companies like defendant who actually make things that people need and use.

    If “practitioner” thinks this stuff is sanctionable, then I think a lot of trial lawyers need to go back to the drawing board regarding how they prove their cases.

  5. “is there ever a basis to accuse anyone asserting a legitimately obtained and putatively valid patent of being a troll”

    When you clutch your pearls that tightly, do your hands sweat?

  6. “Microsoft’s counsel seemed to lack any basis to accuse i4i of being a patent troll.”

    Except in Mooney’s twisted and sleazy world, is there ever a basis to accuse anyone asserting a legitimately obtained and putatively valid patent of being a troll?

  7. Microsoft’s counsel seemed to lack any basis to accuse i4i of being a patent troll. Information Week reported that i4i unsuccessfully tried to sell its products to Microsoft before filing suit. Microsoft met with i4i and saw the product, but hoped that Office 2003 would make i4i’s products obsolete. The jury’s verdict dashed those hopes.

    link to informationweek.com

  8. If you read the links, Practitioner, you’ll see that it was sanctioned to the tune of $40 million in enhanced damages.

  9. “Microsoft’s attempts to paint i4i as a troll seeking a ‘bailout.’ ”

    Shouldn’t this kind of behavior be sanctionable?

  10. Thanks Dennis. We knew this had to be coming, and, as you note, “The jurisprudence on stays pending appeal is somewhat lacking.”
    Interestingly, eBay itself was a case with an injuction that was stayed pending appeal, albiet stayed by the District Court judge. Without that stay there might well have been a de facto forced settlement, and eBay would not have even gotten to the Supremes. Yet as I recall only the IBM amicus brief even tried to get the Sup. Ct. to address the issue of stays of injunctions pending appeal for patent infringement, nowithstanding the relatively high percentage of CAFC infringement reversals. So the eBay decision only set forth the requirements for granting an injunction.
    But would it not thus seem logical that the tests for merely obtaining a stay should be easier in most cases than the tests set forth in eBay?
    If an infringer was actually driving a patent owner out of business, chances are they would already have done so by the time the lower court discovery and trial periods ended unless the patent owner obtained a preliminary injunction, as they should have.

  11. I just feel awful for MicroSoft.

    Every time I have to choose between sending an error report or not the tears just well up.

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