The U.S. Court of Appeals for the Federal Circuit Wednesday dashed Microsoft's hopes of overturning the Texas decision ordering it to pay the tiny Canadian company i4i $290 million for infringing its custom XML editor patent.

The court also upheld the injunction that the district court had slapped on Word 2003 and 2007.

The appeals court however may give Microsoft an en banc hearing on the pricey charge of willful infringement - as it is now the willfulness charge stands. The court said, "A reasonable jury could have concluded that Microsoft ‘willfully' infringed the ‘449 patent based on the evidence presented at trial....Similarly, there is no evidence that Microsoft made a good faith effort to avoid infringement; internal e-mails show that Microsoft intended to render i4i's product ‘obsolete' and assure ‘there won't be a need for [i4i's] product.'"

Whether Microsoft gets its en banc review or not i4i is still expecting Microsoft to try to take the case to the Supreme Court. It believes the Texas decision sets a "dangerous precedent" in determining damages.