At issue is a software program, which was patented by inventor Carlos Armando Amado, that links databases and spreadsheets. Amado sued Microsoft in 2003, alleging that several versions of Office Suite infringed his patent.

A jury ruled in favor of Amado and awarded him 4 cents per infringing unit. The case was appealed and then remanded to a district court, which tripled the damage award.

In the latest appeal, Microsoft asked for damages to be held at the jury award of 4 cents per copy of Microsoft's Office Suite sold with the infringing software. Amado asked for $2.00 per copy, an amount ordered held in escrow.

"Because the district court failed to adequately explain the basis for its award of $0.12 per infringing unit sold during the stay of the permanent injunction, however, and because recent Supreme Court action may affect post-verdict damages, we vacate in part and remand," the appeals court said.

The appeals court said it took no position on the proper amount of damages, saying that "logically" the award should "fall somewhere between" 4 cents and $2 per copy.

The new ruling also said that the U.S. District Court for the Central District of California "did not abuse its discretion" by dissolving its permanent injunction barring Microsoft from using the software.