A small Toronto, Canada-based firm, i4i Inc, has won a patent infringement lawsuit against the software giant Microsoft Corp. - with a US district court in Texas ordering Microsoft to stop selling some versions of its flagship Word software in the US in two months.

The court also ordered Microsoft to pay i4i heavy fines - $200 million in damages and $40 million in "enhanced damages!"

In its 2007 suit filed against the Redmond, Washington-based Microsoft, i4i had claimed that the software maker had consciously violated one of its patents - the 1998 patent on a method for reading XML - in its Word application and its Vista operating system.

Allegedly, Microsoft has used the i4i-patented XML - extensible markup language - in the 2003 and 2007 versions of Word.

Ordering a permanent injunction on Wednesday, the Texas judge prohibited Microsoft from "selling or importing to the United States any Microsoft Word products that have the capability of opening .XML, .DOCX or .DOCM files containing custom XML." The injunction will, therefore, affect all the forthcoming Word products that use the disputed patent technology.

While industry experts opine that Microsoft can easily adjust its programs to abide by the court's ruling, Microsoft intends appealing the order. Microsoft spokesman Kevin Kutz said: "We believe the evidence clearly demonstrated that we do not infringe, and that the i4i patent is invalid."