Microsoft was sued by the University of California and Eolas Technologies in 1999, when the software giant's Internet Explorer program was accused of infringing a patent for a method that allows web browsers to access interactive application programs.
The patent, issued to the University in 1998, has been licensed exclusively to the tiny Eolas since 1994. But according to Eolas' lawyer Martin Lueck:
"Facing competition from Netscape Navigator in the mid-1990s, Microsoft updated its Explorer browser by using Eolas' technology and subsequently bundled it with all of its Windows operating systems since 1995."
In August 2003 a jury agreed, and awarded damages of $520.6 million plus interest to Eolas.
In January this year a Chicago court upheld the award and banned Microsoft from distributing the infringing software, although it put a stay on the ban pending an appeal.
Microsoft is still in the process of appealing the verdict, but in October it detailed changes it is making to the browser to remove any possible future infringement.
The case has caused a furore among the browser community as, if upheld, the patent seems likely to be of widespread applicability. Such was the concern that the W3C, an international standards-setting body for the internet, stepped into the dispute at the end of October when its director, Tim Berners-Lee, wrote to the US Patent and Trademark Office asking that the patent – known as patent '906 – be declared invalid.
The validity of patents can be a difficult and technical issue, but it is recognised that where the feature being patented is already in the public domain – known as "prior art" – then it cannot be patented.
According to the W3C, the sole difference between the web browser described in the '906 patent and typical browsers that the patent filing itself acknowledges as prior art, is that, with prior art browsers, the content is displayed in a new window whereas, with the '906 browser, the content is displayed in the same window as the rest of the web page.
The W3C claims that that feature (i.e., displaying or embedding content generated by an external program in the same window as the rest of a web page) is a prior art, and submitted evidence to the USPTO in an attempt to prove this.
In November the USPTO agreed to re-examine the patent and now, according to Reuters, has issued a preliminary finding that the patent is invalid.
Microsoft spokesman Jim Desler said: "We have maintained all along that, when scrutinized closely, this patent would be ruled invalid," according to Reuters.
Eolas now has 60 days to appeal the finding.