gavelMicrosoft took another blow today in its legal battle over Microsoft Word. A federal appeals court upheld a ruling against the software giant, stating that Word violates a patent owned by Toronto-based company i4i. The court ordered Microsoft to stop selling versions of Word containing the offending feature by Jan. 11.

That’s about three weeks away, but Microsoft says it has been preparing for this possibility since the initial ruling in August. That means consumers should be able to continue buying copies of Word and Office without a hitch. The company said:

With respect to Microsoft Word 2007 and Microsoft Office 2007, we have been preparing for this possibility since the District Court issued its injunction in August 2009 and have put the wheels in motion to remove this little-used feature from these products. 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. In addition, the beta versions of Microsoft Word 2010 and Microsoft Office 2010, which are available now for downloading, do not contain the technology covered by the injunction.

The “little-used feature” in question involves how Word deals with the XML format. (i4i’s products include an application for creating XML documents in Word.)

Oh, and in addition to the injunction on selling Word, the appeals court also upheld the $240 million payment that Microsoft is supposed to make to i4i. Microsoft says that even though it will obey the injunction, it’s also looking at other legal options, such as requesting another hearing or appealing to the Supreme Court.