Yesterday some pretty big news broke about one of Microsoft’s flagship products: Microsoft Word. Paul McDougall reported in InformationWeek that a judge in the U.S. District Court of Eastern Texas ruled that features in Microsoft Word 2003 and 2007 violate the intellectual property protected by a patent held by a company called i4i. As a result, the judge ruled that until Microsoft can remove the offending code from Word, it isn’t allowed to sell the product. The ban takes effect 60 days after the ruling — that was two days ago, so start your countdown clocks at 58 days. The judge also ordered Microsoft to pay i4i $240 million. Microsoft representatives have said that they’re disappointed with the judge’s decision. I’d wager Microsoft CEO Steve Ballmer used more colorful language.

I listened in on an interview with i4i chairman Loudon Owen on CNET’s Buzz Out Loud episode 1040. Hosts Tom Merritt, Molly Wood and Rafe Needleman attempted to get to the bottom of the dispute. Owen said that the core of the problem was an implementation of XML  in Word. That stands for eXtensible Markup Language — it’s not a programming language, but a way to mark up documents and define data.

Anyone who knows how to use XML is allowed to use it — just as anyone who knows sign language is allowed to use it. The company i4i doesn’t own XML. What i4i claims is that the way Microsoft implemented XML violates a patent held by i4i. Owen called it Custom XML and compared it to copyright law — while everyone is free to write something in English, they are not free to copy someone else’s protected work and use it for themselves.

I recommend you listen to the interview. The hosts come to an interesting conclusion about i4i’s motives in pursuing a court case — particularly in the Eastern Texas court. After all, i4i is a Canadian company and Microsoft is based in Washington, so why bring a court case to Texas? Could it be because the court has a reputation for speedy and favorable judgment for those who claim another has violated a patent?

Microsoft is reviewing its options now. Whether Microsoft successfully appeals the ruling, comes to an agreement with i4i and licenses the technology or simply removes that functionality from Word remains to be seen. In the long run, this may just be a tiny blip in the company’s history.

Learn more about Microsoft and patents at HowStuffWorks.com:

How Microsoft Works
How Patents Work
How Intellectual Property Works