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Back to Court for Eolas and Microsoft

The long-running patent dispute over browser plug-ins is due for another round, thanks to a ruling delivered on Wednesday in Microsoft's favor in the six-year old patent infringement case brought by Eolas Technologies.

A federal appeals court upheld the lower court's interpretation of the Eolas patent on browser plug-ins, but said the jury in Eolas' patent infringement suit against Microsoft should have considered whether the patent itself is valid.

Judge James Zagel of the U.S. Court of Appeals for the Federal Circuit ruled that a lower court was wrong to reject Microsoft's arguments that browser plug-ins were an obvious enhancement that had been done before and therefore shouldn't have been patented.

Moreover, it said the lower court erred in throwing out Microsoft's defense that Eolas had engaged in inequitable conduct by withholding information about an earlier browser that also allowed embedded interactive programs in a Web page.

Therefore, it erased the district court's ruling and sent the case back for a new trial on those specific issues.

Eolas executives Michael Doyle, David Martin and Cheong Ang received U.S. Patent 5,838,906 on November 17, 1998, assigning it to the University of California because they had developed the technology at UC San Francisco. They applied for the patent in October 1994, saying they first had demonstrated the technique in 1993.

Eolas claims the patents cover the embedding of small interactive programs, such as plug-ins, Java applets, scriptlets or Microsoft's ActiveX Controls, into online documents that are triggered when the page loads or when a user clicks. Eolas sued Microsoft in February 1999 for infringing on the patent, saying its Internet Explorer browser took advantage of the Eolas invention.

In the decision delivered today, the Federal Appeals Court declined to narrow the patent, agreeing with the way the district court interpreted the patent. That is, the appeals court agreed that, if the patent is valid, Microsoft and presumably, anyone else creating interactive Web pages, infringes on it.

Patrick Ross, a research fellow and communications director for The Progress & Freedom Foundation's Center for the Study of Digital Property, said the decision was promising for Web developers and Internet users. "We are all in favor of property protection when a patent is done correctly," Ross said. "Patents themselves aren't bad, but poorly issued patents are."

Mixed victory

Predictably, both sides claimed the ruling was a victory.

"We won on all the issues that would have been most important for Microsoft," said UC spokesperson Trey Davis, "namely on the question of patent infringement and the damages that followed from that infringement."

"We have maintained throughout this process that the Eolas patent is not valid and today's ruling is a clear affirmation of our position," Microsoft spokesperson Jim Desler said in a statement.

"The infringement stuff stuck," said John Rabena, a partner at the law firm Sughrue Mion, which specializes in software patent litigation.

"But it's probably to be viewed as a victory for Microsoft, in that the federal court has opened the door to a significant batch of evidence dealing with the invalidity of the patent."

Microsoft's Desler said the company welcomed the opportunity to try to prove that Eolas had engaged in inequitable conduct in its patent application. According to U.S. law, a patent is not valid if the patentee took unethical actions such as not informing the patent examiner of possible prior art. "The ruling also gives Microsoft the opportunity to present evidence that Eolas knowingly withheld information about Pei-Wei's invention to the patent office," Desler's statement said.

The new trial will hinge on whether Viola, an early browser created by Perry Pei-Yuan Wei, qualifies as prior art that should have disqualified Eolas from patenting its technology. Wei did not respond to requests for an interview, but his personal Web site contains his history of Viola.

"The Viola browser was the very first Web browser to support interactive embedded objects, and other features such as tables, input forms, stylesheet (sic)," Wei claims. The site includes a screenshot of Viola."

According to Wei, he contacted Michael Doyle, the former UC researcher and CEO of Eolas, informing him that the Viola browser qualified as prior art and included a paper that contained the source code. Yet, Wei wrote, Doyle mentioned only Cello and Mosaic in his patent application; those browsers did not include embedded interactivity.

According to the court document, Wei testified at the trial that he had written the Viola code in May 1993 and demonstrated it to engineers at Sun Microsystems soon after that. But Wei attempted to demonstrate a different version of Viola for the jury -- and couldn't get it to function. That flub may have led the lower court to incorrectly decide that the second version of Viola didn't support plug-ins.

The district court ruled that Wei had abandoned the first version of Viola, and therefore it didn't qualify as prior art. Wednesday's appeals court ruling said that was a mistake.

UC's Davis said it has maintained that the ordered reconsideration of the Viola browser is not a major issue. "We've made the claim repeatedly that it's not a prior art," he said. "If we have to do it again, we will."

Next page: Case Law Brightened, and A Battle on Two Fronts