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Attorneys for Microsoft Corporation - page 10 / 74





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ARGUMENT A jury in the Eastern District of Texas concluded that a portion of an ob-

scure functionality in Microsoft Word called a “custom XML editor” infringed i4i’s patent, which the jury also found not invalid (although the PTO has provi- sionally rejected it on reexamination). The jury, “apparently credit[ing]” the testi- mony of i4i’s experts (slip op. 37), awarded $200,000,000 in royalty damages. The district court not only refused to reduce that award but enhanced it by “only $40 million” (id. at 40), and added post-verdict damages and interest.

The panel’s decision affirmed the $290,000,000 judgment, which now stands as the largest patent infringement judgment ever to be affirmed on appeal. The decision also affirmed a permanent injunction that precludes Microsoft from selling Word with the accused (albeit rarely used) feature.


The $290,000,000 Judgment Warrants En Banc Review In Daubert, the Supreme Court made clear that the Federal Rules of Evi-

dence invest trial courts with a “gatekeeping” responsibility to “ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable.” 509 U.S. at 589, 597. And, nearly 30 years earlier, the Supreme Court recognized that the role of courts in restraining grossly excessive damage awards entails a “de- tailed appraisal of the evidence bearing on damages” upon a timely motion for new trial or remittitur. Grunenthal v. Long Island R.R. Co., 393 U.S. 156, 159 (1968). Both of these judicial safeguards were absent during the trial in this case and after the jury’s verdict. Blue Br. 54-68; Gray Br. 27-36. Microsoft objected to the court’s rulings, and employed the procedural vehicle that the Federal Rules and


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