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The central issue is whether the 1998 Eolas patent - which covers imbedding small programs within browser and purports to cover plug-ins and applets - is valid. Microsoft is bringing forth the defence of 'prior art' by demonstrating that an early web browser developed by Pei Wei included the idea before the patent claim was lodged. Eolas, on the other hand is claiming that because Wei's innovation was 'abandoned' it was never established.

At first hearing, Microsoft looks like it might be onto something. Judge Randall Rader commented that, 'the district judge didn't even let this be considered as prior art' by the jury.

At issue is more than the half billion dollars which Microsoft could easily afford. If the company is forced to make changes to the Internet Explorer browser, it could set off chaos on the world wide web as many sites depend on plug-ins, such as that for Macromedia's Flash or Adobe's Acrobat, to operate properly.

Meanwhile, Microsoft is also appealing to the US Patent Office to have the patent invalidated.

The case continues.