SEATTLE, USA – A federal appeals court ordered Microsoft Corp to stop selling its Word program in January and pay a Canadian software company US$290 million for violating a patent, upholding the judgment of a lower court.

But people looking to buy Word or Microsoft’s Office package in the US won’t have to go without the software. Microsoft said yesterday it expects that new versions of the product, with the computer code in question removed, will be ready for sale when the injunction begins on January 11.

Toronto-based i4i Inc sued Microsoft in 2007, saying it owned the technology behind a tool in the popular word processing program. The technology in question gives Word users an improved way to edit XML, or code that tells the program how to interpret and display a document’s contents.

A Texas jury found that Microsoft Word willfully infringed on the patent. Microsoft appealed that decision, but the US Court of Appeals for the Federal Circuit yesterday upheld the lower court’s damage award and the injunction against future sales of infringing copies of Word.

Michel Vulpe, founder and co-inventor of i4i, said in a statement that the company is pleased with the decision, calling it “an important step in protecting the property rights of small inventors”.

Microsoft said it has been preparing for such a judgment since August. Copies of Word and Office sold before January 11 aren’t affected by the court’s decision. And Microsoft said it has “put the wheels in motion to remove this little-used feature” from versions of Word 2007 and Office 2007 that would be sold after that date.

“Beta” or test versions of Word 2010 and Office 2010, expected to be finalised next year, do not contain the offending code, the software maker said.

Redmond, Washington-based Microsoft said it may appeal further, asking for either a rehearing in front of the appeals court’s full panel of judges or in front of the US Supreme Court.