Driving home last night, I heard a radio report that made it sound as if Microsoft would be halting all sales of Microsoft Word as a result of an appeals court upholding an injunction against the company in a patent suit brought by i4i Inc. of Toronto. But as we noted yesterday, the Redmond company instead says it will continue selling Word, and the Office suite, by removing the feature found to infringe on the i4i patent.

What are the implications? For most users of Microsoft Word, not a lot.

The case involved XML, which stands for Extensible Markup Language, a system that uses underlying tags to define the elements of a document. And it's true that XML-based file formats are standard in Microsoft's latest Office versions.

But the i4i case dealt specifically with custom XML. In its ruling yesterday (PDF, 48 pages) the U.S. Court of Appeals for the Federal Circuit offered a detailed explanation of the technology and the scope of the i4i patent.

XML is one of many markup languages. Markup languages tell the computer how text should be processed by inserting “tags” around text. Tags give the computer information about the text. For example, some tags might tell the computer how to display text, such as what words should appear in bold or italics. Tags can also tell the computer about the text’s content, identifying it as a person’s name or social security number, for instance. Each tag consists of a delimiter and tag name. The delimiter sets the tag apart from the content. Thus, a tag indicating that “717 Madison Pl. NW” is an address might appear as 717 Madison Pl. NW where “address” is the tag’s name and “<” and “>” are the delimiters. Custom XML allows users to create and define their own tags. i4i refers to tags and similar information about a document’s structure as “metacodes.” The specification of the ’449 patent defines “metacode” as “an individual instruction which controls the interpretation of the content of the data.” ...

The ’449 patent claims an improved method for editing documents containing markup languages like XML. The improvement stems from storing a document’s content and metacodes separately. The invention primarily achieves this separation by creating a “metacode map,” a data structure that stores the metacodes and their locations within the document. The document’s content is stored in a data structure called “mapped content.”

In a statement yesterday, Microsoft said the custom XML feature in Microsoft Word is actually not used very much, and it has been working to develop a version of the program without the feature, just in case, even as it has been appealing the injunction. Ed Bott reports on ZDNet that Microsoft was already starting to distribute that alternative version to its industry partners on Monday afternoon, prior to the ruling.

The injunction, which takes effect Jan. 11, doesn't apply to versions of Office sold prior to that date, so the company won't be distributing an update to remove the feature from copies of Office already in use.

So what does this case really matter? Well, apart from the monetary aspect -- a sizable $290 million including judgment, extra penalty and interest -- the i4i case makes it clear that it's possible for smaller companies and entrepreneurs to prevail against Microsoft in patent cases, despite the company's ability to roll out its own giant patent portfolio in its own defense. That's why Loudon Owen, the chairman of i4i, yesterday called the appeals court's ruling "a war cry for talented inventors whose patents are infringed."

Microsoft says it's contemplating further appeal, possibly to the U.S. Supreme Court.

Postscript: On his Standards Blog, Andy Updegrove has an interesting analysis of where the case could go next from a legal standpoint.

Update Microsoft's Gray Knowlton has more on the subject of custom XML, and an explanation of the implications of the court ruling, in this blog post: What is "Custom XML?" and the impact of the i4i judgment on Word.