Microsoft Settles Eolas Suit

The long-running legal battle between Microsoft and Eolas Technologies, which Microsoft was losing, has been settled. The two firms agreed to an undisclosed settlement that resolves the case.

The lawsuit dates back to February 1999, when Eolas, a spin-off from the University of California, filed suit against Microsoft for alleged patent infringement involving plug-in and applet technology. The company accused Microsoft  of using its patented technology in Windows 98, Windows 95 and Internet Explorer.

Eolas was granted the patent on November 17, 1998, which covers technologies for the creation of a browser system that allowed for the embedding of small interactive programs, such as plug-ins, applets, scriptlets or ActiveX Controls, into online documents.

Microsoft was hit with a $521 million verdict in 2003. The case has been on appeal since. Microsoft finally changed IE 5 to avoid the infringement allegations in 2005.

The patent itself is actually owned by the University of California which will get a split of the settlement. Eolas plans to provide additional information at a shareholder meeting on September 4.

The company also said that the settlement will result in the payment of a dividend of $60 to $72 per share. However, since the company is privately held the number of outstanding shares is unknown.

Microsoft issued the following statement to

“We’re pleased to be able to reach an amicable resolution in this long-running dispute with Eolas and the University of California. Microsoft values intellectual property and believes that the proper protection and licensing of IP enables companies and individuals to obtain a return on investment, sustain business and encourages future innovations and investment in the IT industry.”

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