This week’s ruling against Microsoft Corp. in a U.S. courtroom that leveled a permanent injunction prohibiting the software giant from selling or importing its popular Word program may prove to be a cautionary tale for Canadian IT companies on the importance of meticulous intellectual property governance.
Tuesday’s decision follows a verdict in May that awarded Toronto-based i4i Inc. close to US$300 million in damages after a federal jury found Microsoft infringed on i4i’s XML patents.
“I think it shows that even for a small company, a good patent can be immensely valuable,” said Euan Taylor, a Vancouver-based associate of Davis LLP. “You can’t assume that you can go ahead and do whatever you want to do. The courts do take patent rights very seriously and they will enforce them.”
The ruling – a victory for i4i two years after it launched its initial lawsuit – could cause the IT sector to begin keeping an eye on intellectual property issues even more closely than it traditionally has, to avoid breaching patents.
Most companies search intellectual property databases to see if there are any similar technologies, and then have lawyers examine the results and provide opinions, Taylor said.
Overseeing intellectually property concerns is perhaps even more challenging for the technology industry because the nature of the business means being on the cutting edge with the newest advancements. Meanwhile, it takes 18 months for patents to be published, according to Sarah Dale-Harris, a Toronto-based Davis LLP associate.
For a big company like Microsoft, the ruling most likely won’t make a big difference in its operations.
“They’re not a naïve company,” Taylor said. “They have lots of their own IP and I’m sure they’ve thought about this long and hard before going to court over it.… It might wake them up a little bit, that being big does not automatically mean you can trample over everybody else.”
