The sheer size of this first judgment compels Microsoft to fight back, as it could set a dangerous and similarly expensive precedent for the remaining four claims. Microsoft can't afford to accept this ruling as is. It has asked the judge to set aside the ruling and, failing that, has indicated it will appeal. By turning the legal wheels quickly, Microsoft sends a defiant message before the next case, on speech coding technology, is heard in March or April.

This is a pivotal time for Microsoft. It is transitioning its core operating system and productivity suite franchises to Vista and Office 2007, respectively. It faces a significant market challenge to its enterprise Office hegemony from Google, which has just launched Google Apps Premier Edition, and it's also in court against AT&T. Although the two settled a patent infringement suit over speech decoding technology within the U.S. jurisdiction, AT&T subsequently took the case global, claiming the technology embedded in Windows outside of the U.S. represented a misuse of AT&T's intellectual property. The two companies headed to the U.S. Supreme Court this week to have the case heard there.