Companies with products that work on the internet are
slowly waking up to the broad implications of a recent judgment
against Microsoft in a patent infringement case.
The $520m award to Eolas Technologies of Chicago and the
University of California stemmed from a 1999 lawsuit in which Eolas
and the university charged Microsoft with infringing on a 1998
patent owned by the university and licensed to Eolas.
However, the verdict could spell trouble for a wide range of
popular web-based products and services, experts warned.
The patent was developed by Eolas president Michael Doyle at the
University of California in San Francisco and covers technology
which enables small computer programs, often referred to as
"applets" or "plug-ins", to be embedded in web pages and interacted
with through web browsers such as Microsoft's Internet
Explorer.
In response to the judgment against it, Microsoft said it would
make changes to Internet Explorer which may affect a "large number
of existing web pages", according to a statement by the World Wide
Web Consortium (W3C).
In addition to pursuing post-trial motions against Eolas,
Microsoft is also evaluating what changes may be necessary and will
not comment on its work.
The company stands by its claims that it did not infringe on the
Eolas patent, but will work to minimise the effect on customers of
changes to internet Explorer and is co-operating with the W3C to
co-ordinate that effort, a spokesman said.
Technology and legal experts agree that the ruling could affect
a wide range of technology companies with products that interact
with web browsers, or services that rely on customer interaction
through web browsers.
"Fundamentally, [the Eolas patent] describes a way of
implementing plug-ins in a web browser," said Richard Smith, an
independent technology expert in Boston. "People who use
plug-ins such as Flash or Java applets are covered by the Eolas
patent."
Macromedia, which distributes a free plug-in to view Macromedia
Flash files, did not respond to requests for comment. Real
Software, which makes multimedia software that can be played
through web browsers, said it could not immediately comment on the
ruling.
However, the W3C is scrutinising the implications of the Eolas
patent and the legal decisions that led to the company's court
victory over Microsoft. The analysis could take six months or more,
but the group will make its findings public once they are
known.
"There certainly are concerns whenever patent issues ... appear
to be relevant to basic technology. That gets the attention of the
W3C membership," a spokesman said.
Past patent claims, such as those affecting the P3P (Platform
for Privacy Preferences) standard, have stopped development or the
implementation of development standards, the W3C noted.
The W3C is particularly anxious to determine whether any of its
published standards infringe on the Eolas patent. In the meantime,
technologists and executives who feel they may have products that
infringe on Eolas' patent are following the post-trial motions
closely and hoping for an indication about how Eolas and the
University of California will proceed.
Many developers of remote client-server applets believe the
technique was around long before any patent was filed and that this
can be used to defuse patent infringement claims - an argument
known as "prior art".
But Smith warned that technologists routinely underestimate the
reach of patents. "Technology people don't understand what patents
are and they make big claims, like, 'There's prior art.' But there
was none produced by Microsoft."
Assuming the Eolas decision stands, the fact that Microsoft
apparently could produce no prior art will only serve to strengthen
the patent, according to attorney Douglas Kline, chairman of the
patent and intellectual property group at Boston law firm Testa,
Hurwitz & Thiebeault.
"Microsoft would know better than anybody what they were working
on when the patent was filed," Kline said. "To the extent they did
exhibit [prior art], the jury disagreed. So if Microsoft couldn't
prove that their own activity didn't render a patent invalid, it
could be difficult for anyone else to prove it."
The likes of Macromedia, Real and Apple should all be on the
alert following the Eolas ruling, Kline said. "If they didn't know
about this patent before, they do now. And they have guidance about
what one court thinks the patent means."
Under patent law, Eolas and the University of California are
free to chase end users as well as technology companies, according
to attorney Jim Gatto, co-head of the intellectual property group
at legal firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo.
Typically, however, small companies will target one or two large
companies, collecting significant damages and enforcing their
patent rights, he said.
Regardless of what happens in the Eolas case, there are likely
to be more and bigger patent cases in the future, Gatto warned. The
size of the judgment against Microsoft, which is one of the
largest so far in terms of monetary damages, and the increasing
importance of intellectual property to companies' bottom lines,
will drive an interest in pursuing big patent cases, he said.
The Eolas case may send a message to small companies that they
can defend patents in court successfully, even when pitted against
much larger companies with limitless resources like Microsoft,
Gatto added.
Paul Roberts writes for IDG News
Service