News

Supreme Court Declines to Hear Microsoft Appeal in Eolas Case

• By Scott Bekker
• 11/01/2005

Supreme Court justices on Monday turned away Microsoft's appeal without comment. At issue is a $521 million award that Microsoft was supposed to pay to the University of California and Eolas Technologies. Eolas owns exclusive rights until 2015 to technology developed at the University of California that allows software applications on the Internet to work seamlessly with Web browsers.

A jury found in favor of Eolas in a federal court case in Illinois in 2003 and the $521 million award emerged from that trial. A federal appeals court overturned the ruling in March, essentially handing a victory to Microsoft. However the appeals court ordered a new jury trial on the patent's validity, leaving Microsoft open to a repeat verdict.

In its appeal to the Supreme Court, Microsoft argued that the award overreached the authority of U.S. patent law and should only cover domestic sales of Windows, rather than global sales. Such a finding could eliminate 64 percent of a future award based on global sales, according to the software giant.

More than Microsoft's ample pocketbook is at stake. The case has raised the hackles of Internet experts because of its potential to disrupt current usage of the Internet. Roughly 90 percent of Web surfers use Internet Explorer, and breaking IE's ability to run Internet-based programs could substantially reduce the usefulness of the Web for those users.

However, some industry observers say a parallel process in the U.S. Patent and Trademark Office may lessen the impact of the case. While the office upheld the Eolas patent in September, it also appears to have narrowed the patent in a way that could limit its reach.

No date has been set for the new jury trial in Chicago.