A small Toronto company has won a lawsuit against Microsoft Corp. that could prevent the giant software firm from selling some versions of its Word software in the United States.

On Tuesday a U.S. district court judge in Texas issued a permanent injunction barring Microsoft from selling the word-processing program because it violates a patent held by i4i Inc.

That decision upheld a verdict in May that awarded i4i about $290 million US in damages. Microsoft has 60 days to comply with the judge's orders. The company said in a statement it would appeal the decision.

"We are disappointed by the court's ruling," Microsoft spokesman Kevin Kutz said in a statement. "We believe the evidence clearly demonstrated that we do not infringe and that the i4i patent is invalid. We will appeal the verdict."

At issue is Word's use of technology that allows it to read documents that contain custom XML, a data language common in web applications. I4i has a 1998 patent relating to its method for reading XML.

Word 2003 and Word 2007, the most common versions of their software on the market, both allow users to create custom XML documents.