A US judge upheld a jury ruling that Microsoft's Internet Explorer web browser infringed on a patent owned by Eolas Technologies and the University of California, and ordered the company to pay $520.6m in damages.
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Microsoft's motion to suspend a decision until the US Patent and Trademark Office (PTO) completes a re-examination of the patent was also denied.
A spokeswoman for Microsoft in the UK said that the company would appeal, most likely within the next 30 days.
Although Microsoft was barred from distributing versions of IE that include the potentially infringing technology, the injunction has been held until an appeal has run its course.
"We feel good about our prospects on appeal, remain steadfast in our belief that the Eolas patent is not valid and are heartened by the PTO's review of the patent," the spokeswoman said.
"While the judge did not grant all of our post-trial motions, we are pleased the court accepted some of our arguments and decided to stay the injunction pending our appeal."
The patented technology concerned was developed by Eolas president Michael Doyle at the University of California at San Francisco.
The patent describes in part "a system allowing a user of a browser program ... to access and execute an embedded program object", or small computer programs, often referred to as "applets" or "plug-ins".
Eolas, which stands for Embedded Objects Linked Across Systems, jointly holds the patent with the University of California.
Laura Rohde writes for IDG News Service