Eolas Case Back to Lower Court

A federal appeals court has thrown out a controversial patent-infringement verdict against Microsoft and ordered the case to be retried in a lower court. The appeals court’s ruling is significant, because the original verdict, if upheld, would have required Microsoft to change certain technologies in the Internet Explorer (IE) Web browser, which in turn would have forced organizations to redesign many of their Web pages. Nonetheless, this ruling is not final, and a retrial could still find IE in violation.

Microsoft Prevailing on Two Fronts

In Aug. 2003, a jury found that IE violated a patent covering a Web browser’s ability to display interactive content directly in the browser, rather than requiring a new application to be opened. The patent was filed in 1994 by Michael Doyle and other employees of the University of California, was granted in 1998, and is currently held by Eolas Technologies, a company Doyle founded to capitalize on the patent. The verdict set financial damages at more than US$500 million but did not clearly order Microsoft to stop using the patented technology. Nonetheless, anticipating such an order, in fall 2003 Microsoft began previewing changes to IE that would have required Web site designers to make significant changes to Web pages containing interactive content, such as ActiveX controls, Java applets, and embedded QuickTime videos. Without these changes, IE users visiting these pages would experience a barrage of error messages.