Microsoft has failed in its appeal to overturn a ruling which bars it from selling its Word software. Microsoft was found to have infringed a patent owned by a Canadian software company called i4i and is now required to pay damages of $290m (£182m). It will also be prevented from selling certain versions of Microsoft Office and Microsoft Word in their current format.

The injunction will come into force from 11 January 2010 and will ban the sale of Word 2003 and Word 2007, but software sold before this date will remain unaffected.

This particular dispute surrounds a 1998 XML patent, and was first ruled upon in the US in August this year. While Microsoft's launch of an appeal against the original decision to impose an injunction initially stayed the ban on the sale of particular products, Microsoft's attempts to have the case dismissed have failed and it must now cease to sell its infringing software. In the latest ruling, it was stated that "a small company was practicing its patent, only to suffer a loss of market share, brand recognition and customer goodwill as a result of (Microsoft's) infringing acts".

The XML tool is particularly useful when handling large volumes of data, and there are concerns that the injunction, and therefore loss of this tool, could cause these users to be at a disadvantage. However, although the injunction would appear likely to cause serious harm to Microsoft, it has already "put the wheels in motion to remove this little-used feature from these products" and hope that redacted copies of Word 2007 will be available in time for the commencement of the injunction in January. Furthermore, currently downloadable versions of Word 2010 and Office 2010 do not contain the technology which the injunction covers and will therefore not require to be altered.

Microsoft are said to be currently reviewing their legal options, including the possibility of appealing the decision further.