"AbiWord" is a single word, which may be a factor. They might have trouble if it were "Abi Word" or "Word by Abi" or even "Word". It's implausible that another entity could market a competitor of Word (or Windows) by naming it e.g. "Apple Word" or "Apple Windows". I'm going to bet that all the common permutations are trademarked by MSFT.
Also, I'm guessing Abi's limited reach is a factor. If Abi was suddenly taking a meaningful share of usage, they would probably get an angry lawyer letter.
Or is it? If Microsoft has trademarked just "Word", it is very strange that they don't enforce it against these folks:
http://www.abiword.org/
especially in the light of how, some years ago, their lawyers swooped down like hawks on a Canadian named Mike Rowe who put up a "Mike Rowe Soft" consulting business and web site.