To win the case, Microsoft must now prove that the patent is
invalid.
The dispute dates back to 1999, when Microsoft was sued by the
University of California and Eolas Technologies over allegations
that its Internet Explorer program infringed a patent for a method
that allows web browsers to access interactive application
programs.
In August 2003 a jury agreed with the claim and awarded damages
of $520.6 million plus interest to Eolas. This verdict was upheld
in January 2004 and a Chicago District Court imposed an injunction
on the software firm, banning it from distributing the infringing
software.
The ban was stayed pending an appeal - the result of which was
announced yesterday.
The appeal, filed in June last year, related to limitations
placed on the extent of prior art evidence that the District Court
allowed Microsoft to put forward to support its claim that the
technology behind the Eolas patent was already in the public domain
and that the patent was therefore invalid.
Microsoft argued that an earlier browser with the same
abilities, known as Viola, had been developed by software designer
Pei-Yuan Wei before the Eolas patent was filed. Microsoft said the
District Court had not permitted it to put forward evidence about
Viola because it found that Wei had "abandoned, suppressed or
concealed" the browser after its invention. It was therefore not
prior art, said the District Court.
Microsoft argued that Wei had put the browser in the public
domain by demonstrating it to engineers at Sun Microsystems in May
1993, and then posting it on a web site. Evidence of Viola should
have been put to the jury, it said.
Michael Doyle, one of the inventors of the Eolas patent, also
held back evidence of the Viola browser from the US Patent and
Trademark Office (USPTO), said Microsoft.
The Appeals Court agreed, at least in part, finding that while
there had been infringement of Eolas' patent, the trial judge had
erred in not allowing the software giant to put forward either the
Viola evidence or evidence of inequitable conduct on the part of
Doyle. The case has therefore been sent back to the District Court
for a retrial on these issues.
Effectively this means that while Microsoft has been found to
infringe on the Eolas patent, it has a second chance to show that
the patent itself should not have been granted.
Microsoft had also petitioned the court to include only the US
sales of Windows in the calculations relating to the fine imposed
on the company. However the Appeals Court upheld the earlier ruling
on this point, finding that foreign sales of the operating system
should also be included if the patent was found to be valid.
"Today's Appeals Court decision overturning and remanding the
District Court verdict in the Eolas patent case is a clear victory
not only for Microsoft, but for internet users as well," said
Microsoft in a statement. "We have maintained throughout this
process that the Eolas patent is not valid, and today's ruling is a
clear affirmation of our position."
Trey Davis, spokesman for the University of California gave CNET
News.com a different picture. "We cleared most of the serious
issues, so I would consider this a victory for the university," he
said. "On the issues that would have mattered most to Microsoft,
they lost."
Software developers around the world are heaving a small sigh of
relief because, if upheld, the Eolas patent seems likely to be of
widespread applicability.
Such is the concern over the case that in October 2003, Tim
Berners-Lee, director of the W3C, the international
standards-setting body for the internet and the man credited with
inventing the World Wide Web, wrote to the USPTO. He asked that the
patent - known as patent '906 - be declared invalid due to prior
art.
The USPTO is now in the middle of re-examining the patent and
has issued two rulings, both of which were in favour of Microsoft.
However, a definitive decision from the USPTO could take years,
according to commentators.
