Patent logic in Lucent case may benefit Microsoft in its Word appeal

I4i had produced an XML tag editor that had been used with a previous version of Microsoft Word; Microsoft later replaced it with one of its own in all versions of Microsoft Office, though i4i claims that replacement infringes upon its exclusive patent. Had i4i's product been included instead, that company's expert estimated that it might have been used by some 2.1 million customers. Two-point-one million times about a fourth of the average price per copy of Office -- about $98 -- comes up to about $200 million.

Maybe you've already caught some of the stretches in that formula, and apparently the judges' eyebrows were raised here as well. That would assume that everyone would have been happy to pay at least $400 for Word (or for Office with Word), which is a calculation about "the whole market" (a phrase used in the Alcatel-Lucent analysis) that could be too much of an assumption. "Not everyone who is willing to pay $90 or $200 for a product is willing to pay $500," Reuters quotes Judge Moore as having said.

At one point, according to Bloomberg's reporting, when Microsoft's lawyers attempted to proceed on their original plan to argue that the Texas district court judge was unfair, Judge Moore stopped them to say their argument didn't apply here -- that the appeals court could only focus on the jury's conduct, not the judge's. That could very well have been an admonition to the attorneys to stop while they're ahead.

This isn't to say that Microsoft could emerge from this case completely clean, as Reuters also noted Judge Alvin Schall on the panel expressed deep skepticism as to Microsoft's attorneys' arguments that the company had not seen i4i's patent.