UPDATE 1-i4i patent survives Microsoft challenge

* i4i patent upheld by US patent office

* i4i could win $290 million-plus award from Microsoft

* Microsoft may ask Supreme Court to hear case

WASHINGTON, May 11 (Reuters) - Toronto-based i4i has won a further round in a patent fight with Microsoft Corp (MSFT.O) as the patent office confirmed a patent related to text manipulation was valid.

At Microsoft's request, the U.S. Patent and Trademark Office did a reexamination of the i4i patent and upheld its validity late last month, about three years after the legal fight began.

A federal jury awarded i4i $290 million last August after finding that Microsoft had infringed the i4i patent relating to text manipulation software in the 2003 and 2007 versions of Word, Microsoft's word processing application.

Microsoft has said that it has since removed the contested features from its current software.

"We do not necessarily agree," i4i Chairman Loudon Owen told Reuters, adding that the company was unconvinced that Microsoft's patch was adequate to resolve the issue.

Microsoft appealed the jury award, which is accruing interest, but in December a panel of three appeals court judges rejected its arguments.

"We are disappointed (in the PTO decision), 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," said Kevin Kutz, a Microsoft spokesman.

The underlying court case is i4i Limited Partnership and Infrastructures for Information Inc v. Microsoft Corp, U.S. District Court for the Eastern District of Texas, case no. 07-CV-113. (Reporting by Diane Bartz and Bill Rigby; Editing by Tim Dobbyn)