A federal court that hears patent appeals ordered a lower court to reconsider damages to be paid to a Guatemalan developer over technologies in the Microsoft Office suite.

Carlos Amado originally sued Microsoft in 2003, saying that his technologies surrounding databases and spreadsheets were misappropriated in several versions of Office.

After winning the case in 2005, Amado was to receive four cents per infringing copy. Both Microsoft and the inventor appealed the royalty rate to a district court, where a ruling was given in favor of Amado and the rate tripled.

The federal appeals court now says the district court failed to justify why the rate should have been raised. At the same time, however, it did not specify what a fair royalty rate would be for Amado.

Microsoft had agreed to put in escrow $2 for each copy of Office sold. It also has not included Amado's technology in the Office suite since the original 2005 ruling.

The appeals court also urged the lower court to look at the U.S. Supreme Court's AT&T ruling when deciding the proper royalty rate. In that case, the Supreme Court found that liability could not include the installation of software overseas.

Finally, a permanent injunction that was attached to the ruling was also thrown out, but the court affirmed that Microsoft did indeed infringe on Amado's rights to his work.

Microsoft seemed pleased with the decision. "We are gratified that the court upheld the trial court's decision to dissolve the injunction in light of the Supreme Court's eBay decision," Microsoft spokesperson Jack Evans told BetaNews.

"We are also pleased that the court agreed that the trial court should consider the impact of the Supreme Court's AT&T ruling, and the potential reduction of the damages award based on that ruling," Evans added.