Company touts a patent office ruling as a "very material step" forward in its claim against Microsoft regarding XML features in Office

The patent office, I4i said, has "confirmed the patentability of all claims" of I4i's patent No. 5,787,449, which was granted in 1998. The patent office had been re-examining that patent as Microsoft office 2007 fought I4i's claims regarding XML features in Office.

"This is a very material step in our litigation against Microsoft. Put simply: i4i's patent is clearly and unequivocally valid. Even though Microsoft attacked i4i's patent claims with its full arsenal, the Patent Office agreed with i4i and confirmed the validity of our...patent," Loudon Owen, chairman of i4i, said in a statement Tuesday.

Microsoft vowed to stay resilient, indicating that there may be more legal maneuvering yet to come.

"We are disappointed, but there still remain important matters of patent law at stake, and we are considering our options to get them addressed, including a petition to the Supreme Court," Kevin Kutz, director of public affairs for Microsoft, said in a statement.

Things have not been going Microsoft's way in this patent dispute. In January, a court injunction went into effect that forbade Microsoft from selling certain versions of its Office software suite. Recent versions of Microsoft Word, a major element of Office, contain a custom XML feature that a U.S. District Court in Texas last year found to infringe on I4i's patent. That court also determined that Microsoft must pay $200 million to Toronto-based I4i.

In April, Microsoft Office Ultimate 2007 lost a bid for a review by a full appeals court.

"i4i's...patented invention infuses life into the use of Extensible Mark Up Language (XML) and dramatically enhances the ability to structure what was previously unstructured data," Owen said in I4i's statement. "As the magnitude of data grows exponentially, this is a critical technological bridge to controlling and managing this sprawling octopus of data and converting it into useful information."