In August, Microsoft lost a lawsuit brought by small Toronto-based company i4i, which argued that versions of Microsoft Word violated its XML-related patent. Microsoft appealed, of course, and it looked like the case would be tied up in the legal system for years--until Dec. 22.

On that date, the U.S. Court of Appeals for the Federal Circuit decided to uphold the original verdict in the case, and ordered Microsoft to stop selling Word by Jan. 11. If the prospect of being forced to pull one of its flagship products wasn't enough, Microsoft also faces a $290 million fine. The company will be allowed to provide technical support to Word customers, but it will be barred from instructing users on how to use the custom XML editor or from marketing copies of Word that allegedly violate the patent.

This is not turning into a good week for Microsoft, in other words. I have the feeling that an entire platoon of Microsoft legal assistants and lawyers will be spending the holidays at a conference table somewhere, eating takeout Chinese and frantically sorting through legal documents.

But i4i, the company with its hand on the roasting spit, seems obviously pleased with the verdict.

In a Dec. 22 statement, i4i co-founder Michel Vulpe said his company was "especially pleased with the court's decision to uphold the injunction, an important step in protecting the property rights of small inventors."

Microsoft had no immediate comment on the decision.

In the original verdict, handed down on Aug. 11, a U.S. District Court in East Texas filed a permanent injunction against Microsoft banning the company from "selling, offering to sell and/or importing in or into the United States any Infringing and Future Word Products that have the capability of opening a .XML, .DOCX or .DOCM file ('an XML file') containing custom XML."

Microsoft was ordered to yank both Word 2003 and Word 2007 from store shelves within 60 days, on top of paying nearly $300 million in fines. My eWEEK colleague Jeff Cogswell did a fantastic job at the time of breaking down the ins and outs of the lawsuit, and how Word allegedly violated i4i's patent.

If you heard a loud "boom" during the afternoon after the verdict announcement, that was Learjets filled with Microsoft lawyers breaking the sound barrier, as they raced to file an appeal. The company got its wish on Sept. 3, when the U.S. Court of Appeals for the Federal Circuit (Washington) granted Microsoft's request to keep selling Word for the duration of the case.

Despite the prospect of a protracted legal battle, the heads of i4i made clear their intention of fighting to the bitter end.

"Where we come from, if someone tries to take something that belongs to you, you stand up to them; you don't just reach for the calculator," Loudon Owen, chairman of i4i, told me in August. "We're not in a position to guess or second-guess or speculate as to what the court is going to do."

If I had to guess--and I'm not one of the lawyers currently sorting through injunction papers while wondering if three-day-old spring rolls technically count as a foodstuff, so my legal knowledge is questionable--I'd bet Microsoft will settle out of court. Either that, or else they'll have to attempt to swap out the offending code, but that could be a tricky and time-consuming proposition.

Either way, I'm betting that i4i will continue its full-court press.