A U.S. court has rejected Microsoft's request that a full panel of judges hear its appeal in a patent dispute with Toronto's i4i.

Microsoft made the request in January after a judge ruled that its Microsoft Word software infringed on a patent owned by i4i. Courts awarded the small company $200 million US in damages in August 2009, while Microsoft's initial appeal was rejected in December.

The United States Court of Appeals for the Federal Circuit denied Microsoft's latest request, for a rehearing with 11 judges, on Thursday.

The Toronto company cheered the news.

"This has been a long and arduous process, but this decision is a powerful reinforcement of the message that smaller enterprises and inventors who own intellectual property can and will be protected," i4i chairman Loudon Owen said in a statement.

Redmond, Wash.-based Microsoft said it was disappointed and that it was reviewing its options.

"We continue to believe there are important matters of patent law that still need to be properly addressed, and we are considering our options for going forward," a spokesperson for the company told Reuters.

Microsoft could still make a new appeal request or take the case to the U.S. Supreme Court.

The company has removed the infringing code from its Word software.

The code involved some versions of Word 2003 and Word 2007 that used i4i's technology to process electronic documents.