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Microsoft granted stay of Word injunction

Landmark injunction would have required the software giant to stop selling its popular Word in its current form by next month.

Updated at 8:30 p.m. PDT with comment from i4i.

Microsoft has been granted a stay of a landmark injunction in a patent infringement case that would have required the software giant to stop selling its popular Word in its current form by next month.

The U.S. Court of Appeals for the Federal Circuit on Thursday granted Microsoft's motion for a stay, pending appeal, of an injunction issued in August by a federal judge that bars sales of Word that include a custom XML code found to infringe on patents held by i4i--the plaintiff.

"We are happy with the result and look forward to presenting our arguments on the main issues on September 23," Microsoft spokesman Kevin Kutz said in a statement.

In response to the court's decision, i4i expressed confidence in its position and accused Microsoft of employing "scare tactics."

"Microsoft's scare tactics about the consequences of the injunction cannot shield it from the imminent review of the case by the Federal Circuit Court of Appeal on the September 23 appeal," i4i Chairman Loudon Owen said in a statement. "i4i is confident that the final judgment in favor of i4i, which included a finding of willful patent infringement by Microsoft and an injunction against Microsoft Word, was the correct decision and that i4i will prevail on the appeal."

Toronto-based i4i sued Microsoft in March 2007 alleging that the Redmond,Wash.-based software giant violated its 1998 patent (No. 5,787,449) for a document system that eliminated the need for manually embedded formatting codes. In May, a jury ordered Microsoft to pay $200 million for infringing on a patent held by i4i.

In filing its formal appeal last week, Microsoft made a number of arguments for overturning the infringement finding, saying that the judge made several procedural errors and failed to live up to his role as "gatekeeper."

In addition to pursuing its appeal, Microsoft has other options, including creating a technical workaround, removing the XML function, or reaching a settlement with I4i.

I4i said earlier that it is not seeking to torpedo Word, but does want the infringing custom XML code removed.