Microsoft has lost an appeal in a patent case over Microsoft Word. A U.S. court of appeals upheld a jury verdict against the company for infringing on a patent held by Toronto’s i4i.

Microsoft lost the case to a tune of $290 million. Reuters reports:

The court also affirmed an injunction that prevents Microsoft from selling versions of its Word program which contain the offending software, set to take effect January 11, 2010. Older versions of Word are not affected.

Microsoft said it is taking steps to remove the feature from Microsoft Word 2007 and Microsoft Office 2007 put on sale from that date.

The disputed patent feature relates to the use of XML, or extensible markup language, used for manipulating text, in the 2007 versions of Word. Microsoft described it on Tuesday as a “little-used feature”.

“We couldn’t be more pleased with the ruling from the appeals court which upheld the lower court’s decision in its entirety,” said Loudon Owen, Chairman of i4i. “This is both a vindication for i4i and a war cry for talented inventors whose patents are infringed.”

“The same guts and integrity that are needed to invent and go against the herd, are at the heart of success in patent litigation against a behemoth like Microsoft,” added Owen. “Congratulations to our entire team who provided such dynamic leadership, courage and tenacity!”

The abstract for the patent in question reads:

A system and method for the separate manipulation of the architecture and content of a document, particularly for data representation and transformations. The system, for use by computer software developers, removes dependency on document encoding technology. A map of metacodes found in the document is produced and provided and stored separately from the document. The map indicates the location and addresses of metacodes in the document. The system allows of multiple views of the same content, the ability to work solely on structure and solely on content, storage efficiency of multiple versions and efficiency of operation.

“This ruling is clear and convincing evidence that our case was just and right, and that Microsoft wilfully infringed our patent,” said Michel Vulpe, founder and co-inventor of i4i. “i4i is especially pleased with the court’s decision to uphold the injunction, an important step in protecting the property rights of small inventors. We will continue to fully and vigorously enforce our rights and we invite all potential customers interested in custom xml to contact us.”

Back when Microsoft first lost the case, the company issued a statement saying, “”We are disappointed by the court’s ruling. We believe the evidence clearly demonstrated that we do not infringe and that the i4i patent is invalid. We will appeal the verdict.”

By Chris Crum