Canadian firm i4i was first awarded $200 million by a Texas federal jury back in May of 2009 after suing Microsoft for infringing on a 1998 patent relating to the handling of custom formatting in XML documents in formats like .xml or .docx.

In August 2009, a judge also granted i4i’s request for an injunction on the sale of Microsoft Word, though it would be suspended pending appeal.

Now, in December 2009, Microsoft lost the appeal, and has to stop selling products containing the offending code – in this case, Microsoft Office 2007 and Microsoft Word 2007.

In addition to updating its software Microsoft clarified that Office 2007 and Word 2007 licenses sold before the January 11, 2010 cutoff aren’t affected, and that Microsoft Office 2010, currently in open beta, didn’t contain it from the get-go. Of course, Microsoft also is planning to pursue further legal options.