$520.6 million settlement-MSFT-2003
posted on
Apr 12, 2007 12:33PM
A federal court jury yesterday decided that Microsoft Corp. must pay $520.6 million to a Chicago technology entrepreneur and the University of California after deciding that the company's popular Internet-browsing software infringes an existing patent.
The award, one of the largest in a civil case this year, comes as Microsoft faces possible antitrust fines in Europe and more than 30 other patent-infringement suits.
Michael D. Doyle, chief executive of Eolas Technologies Inc., claimed that while he was at the University of California in San Francisco in the early 1990s, he and two other researchers developed the technology that allows a Web browser, such as Microsoft's Internet Explorer, to access interactive features of a Web page.
Those features, such as altering data or viewing objects from different angles, are central to the way Web browsers now operate, particularly enabling online commerce.
The three men filed for a patent in 1994 and were awarded it in 1998. Microsoft's browser came out in 1995 but the suit alleged that Microsoft began using the technology after the patent was filed and used it after the patent was issued. They argued that Microsoft's infringement allowed it to destroy competition from Netscape Communications, which pioneered Web browsing but now has less than 10 percent of the market.
Microsoft spokesman Jim Desler said the company will appeal the verdict, which came in U.S. District Court in Chicago. He said the browser was built upon other technology developed by Microsoft.
Doyle said his firm, which develops technologies to license to other firms and has more software in the patent pipeline, will now be able to expand his business.
Administrators of the University of California, which holds the patent and licensed the technology exclusively to Doyle's company, applauded the decision.
"This verdict is a significant landmark in defining and protecting Internet technology whose benefits literally reach the whole world," James E. Holst, the university's general counsel, said in a statement. "As a public institution that reinvests its licensing revenue in its larger research mission, we are gratified by the jury's recognition that UC and Eolas must be fairly compensated for use of its patented technology."
School officials declined to disclose how the money would be split between Eolas and the university.
The award is one of several recent defeats for major technology firms.
Patent-infringement suits are commonplace, especially in technology. But they rarely succeed in even getting to trial. This year, however, tech powerhouses eBay Inc. and Research in Motion Ltd., which makes the popular BlackBerry mobile e-mail device, have lost similar cases.
Microsoft still faces more than 30 pending cases, while 12 others have been thrown out in the past three years.
One of the most significant cases, filed by Silicon Valley-based InterTrust Technologies Corp., charges that security features in Microsoft's software violate its patents. A judge in California has ruled that the case can proceed to trial, though she has first required the two sides to try to settle