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August 18, 2004 3:28 PM PDT

Microsoft wins again in Eolas patent dispute

The U.S. Patent and Trademark Office has handed Microsoft a second victory in its dispute with Eolas, rejecting browser patent claims that could roil the Web if upheld.

The patent in question, owned by the University of California and licensed exclusively to its Eolas software spinoff, describes the way a Web browser opens third-party applications, or "plug-ins," within the browser. Download the full ruling here (1MB PDF file).

News.context

What's new:
U.S. patent agency rejects browser patent claims against Microsoft that threatened to disrupt the way the Web works.

Bottom line:
The decision is a big victory for the software giant and another setback for Eolas, the university spinoff that claimed the rights to the way browsers open third-party applications. But Eolas has at least one more opportunity to argue its case.

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In the second of what are projected to be three opinions, or "office actions," on the case, the Patent Office rejected all 10 patent claims under review, according to a source familiar with the document. The agency's first office action on the matter came in February.

Attorneys for Eolas and the university could not be reached for comment. The Patent Office confirmed it had mailed the office action Monday but declined to comment on its substance. A UC representative said the university had not yet seen the office action and declined to comment further.

Microsoft praised the PTO's move.

"Today's action is another step in the Patent Office's reconsideration of the Eolas patent," said Microsoft spokesman Jim Desler. "We've maintained all along that when scrutinized closely, the Eolas patent would be ruled invalid."

Patents and copyrights have been taking on a higher profile in the software industry in recent months. The issue is especially contentious in the open-source arena, where the Linux operating system has become embroiled in a number of intellectual-property disputes. And Microsoft itself, which is trying to boost the licensing of its intellectual property to other companies, says it is on track to file 3,000 patent applications this year.

Eolas and the university still have at least one more chance to argue their case before the patent examiner in a decision being watched closely by the software industry.

If upheld, the patent could force Microsoft and other browser makers to take out a license if they want to run, within the browser, applications like Macromedia's Flash animation software, Adobe's PDF document software, or Sun Microsystems' Java programming language. A workaround could disrupt millions of pages around the Web, industry and standards experts warn.

The fight between UC and Microsoft is proceeding on two fronts. The legal battle has seen UC win against Microsoft a $521 million infringement judgment, later raised to $565 million and poised to climb from there. Microsoft is appealing that decision.

On the second front, Microsoft's allies in the software industry last fall persuaded the Patent Office to initiate a re-examination of the patent on the grounds that it was awarded improperly.

In its first office action, the Patent Office in February appeared to side with Microsoft and its allies, mirroring their argument that similar technologies, or "prior art," had been demonstrated before Eolas filed its application in 1994.

The university and Eolas subsequently replied to the office action, arguing that the cited technologies were irrelevant to the patented one.

Even if UC and Eolas fail to sway the patent office and it winds up ruling against them, they have two levels of appeal, the first to the Board of Patent Appeals and Interferences and the second to the Federal Circuit Court of Appeals in Washington, D.C.

See more CNET content tagged:
Eolas Technologies Inc., patent, software industry, university, intellectual property

Add a Comment (Log in or register) 21 comments (Showing first 20 comments)
One issue worth getting behind Microsoft on..
by unknown unknown August 18, 2004 6:07 PM PDT
as it potenially affects everyone who uses and developes for the Internet.
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The Specter of Manifest Destiny
by EmbSysPro August 19, 2004 4:02 AM PDT
When is being right considered wrong? The answer is, when you are being challenged by the dominion of Microsoft and its minions. There are potentially millions of lines of code and billions of dollars at stake because of the deceit that has been perpetrated by the usurping of the Eolas patent. And because of the fact that the ?.Net? is inextricably bound by this original sin, the innocent shall become victim.
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Patent validity twist
by David Arbogast August 19, 2004 7:33 AM PDT
It'll be interesting to see how many open-source proponents suddenly start supporting this invalid patent only because Microsoft stands to gain from the ruling. It is the open-source crowd that has been most vocal in its opposition to the patent system.
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Re-visit the patent law
by connectr August 19, 2004 7:39 AM PDT
The real problem is the lack of capable patent investigators within the USPTO. Many, many of the patents granted over the last two decades should never have been granted at all. It is really interesting the attitude of the big IP holders, because they almost never pay a licensee fee, they just allow the “offender” to license something from their pool. If Microsoft is filing 3,000 patent applications this year, as the article stated, I wonder how many will be simply to there to be used against someone else, and not ever used by Microsoft?

The real problem is that we need a top to bottom overhaul of the USPTO, starting with Congress not allowing any copyright to be granted for a period longer than 7 years. But there is fat chance of Congress doing anything useful (is Congress the opposite of Progress?).
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I have to disagree
by August 19, 2004 11:03 AM PDT
I read an article about a year ago when those whole plug-in mess started that indicated most companies now are patenting everything because it is a great way to increase profits. Simply wait until another company has used your patented technology for a few years, gotten themselves make a lot of money and the go after them. Sure they are out some for court costs (which in most cases they get back as part of the settlement). Many companies have made a considerable amount of money doing thing without ever offering anything to the public or industry at large. Look at theis plug-in law suite. Neither of the groups involved in filling the law suite has offered much of anything to anyone. But, if they win they get $565 million or more from Microsoft. Now I call that a win fall for a patent that they aren't even using.

The one and only thing you can count in when it comes to dealing with patent holder and big corporations or organizations is that greed wins out. They don't get a damn about anything other than the all mighty buck.

Robert
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They Should do away with software patents
by simcity1976 August 19, 2004 9:40 PM PDT
Software Patents are just profound, it's like someone patenting books. copyright's should be the only issue with software not patents.
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m$ is killing inovation
by August 21, 2004 5:14 AM PDT
This is realy bad becourse this means that you may only use third party plugin for viewing .pdf, Java applets, movie files, etc in IE. In this way m$ is killing inovation by doing this, IE is a bad browser
but it is used by a lot of people and they are trying to protect there position from Mozilla Firefox and Opera by limit others to inovate.
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MS had it coming
by aabcdefghij987654321 September 2, 2004 5:34 PM PDT
It's unfortunate, but this points out the need to adhere to W3C standards, rather that trying to "embrace, extend, and extinguish" with proprietary protocols.

riffraff
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