Victory For Microsoft in Browser Plug-In Appeal

Microsoft said an appeals court decision that sends a browser patent
dispute over ActiveX controls and browser plug-ins back to a lower court is
a victory not only for the company, but for Internet users, as well.

The appeal decision comes as the U.S. Patent Office is in the process of
re-examining the Eolas patent.

“We have maintained throughout this process that the Eolas patent is not
valid, and today’s ruling is a clear affirmation of our position,” the
company said in a statement Wednesday after the court ruling.

“The potential enforcement of the Eolas patent further created confusion
that could have impacted the use of the World Wide Web. This concern was
shared by others in the industry — including the W3C — who have also
maintained that the patent is invalid and have requested a re-examination by
the U.S. Patent Office.”

Eolas, a spin-off from the University of California, sued Microsoft in
February 1999 for patent infringement related to the way the Internet
Explorer browser handles media and plug-ins within Web pages. Eolas’ patent
No. 5,838,906 was granted on Nov. 17, 1998. It covers the technique of
embedding small interactive programs, including plug-ins, applets,
scriptlets or ActiveX controls, into Web pages.

In August 2003, a Chicago jury ordered Microsoft to pay $521 million to
the University of California and Eolas Technology.

The decision by a U.S. Circuit Court effectively overturns a lower-court
ruling that the ActiveX technology used in Internet
Explorer infringes on a patent. The ruling raised concerns over the
prospect that Microsoft might have to alter its dominant IE browser, a move
that could cripple a wide variety of common Web applications, such as online
ads that depend on Macromedia Flash technology.

Prior to today’s ruling, Microsoft had lost twice in the suit, once in a
jury trial and once on appeal. But in this case, it asked the U.S. District
court to overturn the $521 million judgment and injunction against
distribution of Internet Explorer.

Microsoft said the latest ruling would give it the opportunity to tell
the jury the whole story of how this technology was developed “and to
present evidence that shows that Eolas did not invent this technology, and
that it was developed by others, particularly Pei-yuan Wei and his
colleagues at O’Reilly and Associates.”

“They are the true pioneers of this technology. The ruling also gives
Microsoft the opportunity to present evidence that Eolas knowingly withheld
information about Wei’s invention to the Patent Office.

Today’s victory
reinforces the strength of our position in patent litigation. We look
forward to the next steps in this process and the opportunity to present our
whole case on this matter.”

More to follow.

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