Microsoft loses $500 million plus patent battle

By Steve Malone

Posted on 12 Aug 2003 at 10:20

Microsoft has lost a major patent infringement case against small developer Eolas. A federal court in Chicago has decided that Microsoft must pay the company $520.6 million in compensation for infringing the patent held by Eolas.

The suit hinged around one of today's fundamental technologies of the Internet that makes applets and plug-ins possible. The Eolas '906 patent was granted by the U.S. in 1998, for creation of the first browser system that allowed for the embedding of small interactive programs, such as plug-ins, applets, scriptlets or ActiveX Controls, into web pages. The court held that Microsoft infringed the patent by building the technology into Internet Explorer.

Microsoft had said that it had used its own technologies to build these capabilities into IE. The Redmond giant has said it will appeal the verdict.

The verdict, one of the biggest this year, shows once again that enforcing patents on Intellectual Property is one of the biggest growth areas in the technology industry.