As we reported yesterday, Microsoft has lost a federal appeal over a copyright case involving the MS Office program, MS Word. In short, Microsoft breached a patent on a technique for opening XML (Extensible Markup Language) documents in MS Word.

What is XML?

XML is something of a sequel to HTML (Hyper Text Markup Language), which is the language used for creating the layout of a webpage.

Whereas HTML "tags" decide how text appears on screen, XML tells a computer what the text is about. This effectively turns web content into a type of database and makes it easier to organize and manipulate -- which is especially useful for search engines, like Google.

Unlike HTML, however, XML does not have a fixed set number of tags, which allows XML users to define their own markup.

What does XML have to do with MS Word?

The system designed and patented by i4i involved the way a program opens a document containing customized tags. Microsoft was found to have used this system in Word without permission.

The case involves Word 2007 and the Office 2007 suite only. Other editions of Word or Office are not affected. The case only affects sales in the United States.

How Will MS Word / MS Office be Affected?

Microsoft has already found a way to alter MS Word to comply with the court ruling. It is currently working to replace retail discs and has sent out an emergency patch to computer manufacturers to update machines in stock which have Word or Office 2007 pre-installed.

The change means that Word is still able to open XML documents. However, any customized XML tags in the document will be automatically removed before the document is open. (Source: microsoft.com)

What Penalties does Microsoft Face?

As it stands, Microsoft currently faces a total fine of $290 million.

The fines include $200 million as punishment for the patent infringement, $50 million in costs and an additional $40 million penalty for behavior by Microsoft lawyers in court which the judge found unacceptable. It's possible that even if it can't find a way to overturn the verdict (which would now have to involve fighting on a point of law rather than the facts of the case), Microsoft may still challenge the size of the fines. (Source: informationweek.com)