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Patent Office upholds Eolas browser patent

Scene set for re-trial

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Microsoft has suffered a blow in its battle against a claim that Internet Explorer infringes a web browser patent: the US Patent and Trademark Office (USPTO) announced this week that it has re-examined the patent and found it to be valid.

The patent relates to a method that allows web browsers to access interactive application programs, and is owned by the University of California, but licensed by tiny tech firm Eolas Technologies.

Eolas and the University of California sued Microsoft in 1999, and many were stunned when a jury agreed with the claim in 2003 and awarded damages of $520.6 million plus interest.

That verdict was upheld in January 2004 and a Chicago District Court imposed an injunction on Microsoft, banning it from distributing the infringing software. But the ban was stayed pending an appeal, and in March this year an Appeals Court granted Microsoft a reprieve.

Microsoft's appeal related to limitations placed on the extent of prior art evidence that the District Court allowed Microsoft to put forward to support its claim that the technology behind the Eolas patent was already in the public domain and that the patent was therefore invalid.

The Appeals Court agreed, finding that while there had been infringement of Eolas’ patent, the trial judge had erred in not allowing Microsoft to put forward evidence of an earlier browser with the same abilities, known as Viola, or evidence that Michael Doyle, one of the inventors of the Eolas patent, had allegedly held back evidence of the Viola browser from the USPTO.

The case has therefore been sent back to the District Court for a retrial on these issues – effectively meaning that Microsoft has to show that the Eolas patent is invalid.

Its case will be made harder by Wednesday’s USPTO decision that the patent is indeed valid.

The USPTO began its re-examination of the patent in 2003, following complaints from Microsoft and other developers in the wake of the jury infringement finding.

The concern was that the patent, if upheld, could be applied widely. Even the W3C, the international standards-setting body for the internet, stepped in. In October 2003, W3C director Sir Tim Berners-Lee, the man credited with inventing the World Wide Web, wrote to the USPTO asking that the patent be declared invalid.

The USPTO agreed to look again, and in two earlier stages of the re-examination process found the patent to be invalid. But on Wednesday, it ruled that the patent was valid, and that a re-examination certificate would be granted to the University of California.

Eolas’ lead trial attorney, Martin R Lueck, said: “Given the appeals court’s affirmation of Microsoft’s infringement and the favourable resolution of the re-examination, we look forward to quickly dispatching the remaining issues before the district court so that the university and Eolas can be fairly compensated for the use of their property right."

Speaking to CNET News.com, a Microsoft spokesman said, “This is very disappointing news, but we remain committed to seeing this case through to a successful resolution.”

According to anti-software patent campaigner Florian Mueller, “Pro-patent politicians told us that broad and trivial patents can be invalidated. If even Microsoft with all of its resources doesn't always succeed in that, what can smaller companies do?”

“Microsoft isn't quite ready yet to support our cause directly, but that might change after several more Eolas cases," he added.

See: The USPTO's Reasons for Patentability/Confirmation Notice" (77-page / 2.8MB PDF)

Copyright © 2005, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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