YNOT – If you have a whole bunch of Microsoft Word documents on your computer that are saved in the current default .docx format, your next version of Microsoft’s popular word processor might not be able to open them. That’s because an appeals court ruled that Microsoft Word 2007 infringes on a patent held by a small Canadian company, i4i Inc.i4i originally sued the US giant Microsoft in 2007, claiming that Microsoft’s decision to built an XML editor into its latest version of Word infringed on i4i’s patent. This same feature is what allows Word to open documents that are saved in the .docx file format, which is the current default for Microsoft Word 2007.

The US Court for Eastern Texas found in favor of i4i last August, and Microsoft appealed that decision. Now that an appeals court has also ruled in favor of i4i, Microsoft must pay a $290 million fine and either stop offering Microsoft Word 2007 and other Office 2007 products by January 11th, or else offer a new version with the infringing features stripped out.

“In this case, a small company was practicing its patent, only to suffer a loss of market share, brand recognition, and customer goodwill as the result of the defendant’s infringing acts,” the appeals court said in a document that was made available this week.

The chairman of i4i, Loudon Owen, said the decision was a victory for innovation.

“We couldn’t be more pleased with the ruling from the appeals court which upheld the lower court’s decision in its entirety,” Owen said in a statement. “This is both a vindication for i4i and a war cry for talented inventors whose patents are infringed. The same guts and integrity that are needed to invent and go against the herd, are at the heart of success in patent litigation against a behemoth like Microsoft.”

Microsoft plans to offer a new version of the affected products in advance of the January 11th deadline. The current beta versions of Microsoft 2010 do not contain the infringing technology.

“With respect to Microsoft Word 2007 and Microsoft Office 2007, we have been preparing for this possibility since the District Court issued its injunction,” Microsoft said in a statement.

“Therefore, we expect to have copies of Microsoft Word 2007 and Office 2007, with this feature removed, available for U.S. sale and distribution by the injunction date,” Microsoft said.

Existing versions of Microsoft Word 2007 will not be affected by the court’s decision. Beta versions of Microsoft Office 2010, available now for download, do not include the infringing features.