We first reported on August 12, 2009 that a Texas-based court ruled in favor of i4i Corp, a Toronto-based firm, that ordered Microsoft to cease selling its popular Word program because of alleged patent infringement related to custom XML editing (U.S. Patent Number 5,787,449). The Texas-court in that ruling also fined Microsoft $240 million.

At that time, Microsoft spokesman Kevin Kutz said, “We believe the evidence clearly demonstrated that we do not infringe and that the i4i patent is invalid,” and said the company would appeal.

The appeal ruling today upheld the previous ruling.

Microsoft today issued a new patch that complies with the ruling, stripping Office 2007 products of XML editing capability.

The court said today that the patent holder suffered “loss of market share, brand recognition, and customer goodwill as the result of the defendant’s infringing acts,”