A small Toronto firm has won a key ruling in its patent infringement case against software giant Microsoft Corp.

A Texas judge this week found the Microsoft "wilfully" violated a patent held by Toronto's i4i Inc. by including certain features in its popular Microsoft Word software.

The judgement upheld an earlier jury ruling against Microsoft and added another $90 million to the $200 million in damages that was originally awarded.

The court also ordered a permanent injunction against Microsoft, to take effect in 60 days, which would prevent it from selling copies of its popular word processing software in the United States that include the patented technology.

"We feel vindicated with this result," Michel Vulpe, the founder of i4i and inventor of the patented technology in question, said in a statement yesterday.

The patent in question relates to so-called "extensible mark-up language," or XML, which allows users to create forms and templates in Word with tagged fields. The information in those fields can then be managed in a database.

For example, the U.S. Food and Drug Administration uses the feature to help track information about prescription drugs.

Microsoft said yesterday that it plans to appeal the ruling.

"We believe the evidence clearly demonstrated that we do not infringe and that the i4i patent is invalid," the Redmond, Wash. company said in a statement.

While i4i and Microsoft had previously worked together so clients could add XML functions to Word as a plug-in, a patent infringement suit was filed after Microsoft began including the feature with each copy of its word processing software that it shipped, beginning with Word 2003.