Microsoft Holds Off on Major Changes to Web Browser

By Reed Stevenson

SEATTLE (Reuters) - Microsoft Corp. said on Thursday it would hold off making key changes to its Internet Explorer Web browser despite an earlier verdict that found parts of the popular program infringed on technology it did not own.

Microsoft, which had said earlier it would make such changes, said it believed that its claim on underlying technology for the Web browser would be upheld by the U.S. Patent and Trademark Office.

Microsoft had said last year it would change Explorer and other widely used programs after an Illinois jury delivered a $521 million verdict against it for infringing on technology developed by a privately held firm, Eolas Technologies Inc., and the University of California.

The dispute involves Web browser technology that allows other mini-applications to work with Microsoft's Internet Explorer.

The U.S. Patent and Trademark Office said in November it would reexamine the Eolas patent after Internet advocacy groups including the World Wide Web Consortium raised claims that preexisting inventions may invalidate Eolas' patent claims.

The action by the Patent Office may result in the cancellation of the Eolas patent, Microsoft said in a statement issued on Thursday.

Given these circumstances, and after consulting industry colleagues and developers, Microsoft, for now, will not be releasing an update to Internet Explorer, it said.

The lawyer who represented Eolas in its lawsuit, which was brought against Microsoft in 1999, said he was confident that his client's patent would be upheld.

I'm pretty confident that when the patent office looks at this, they're going to see they were right the first time, said Martin Lueck, who heads the business litigation group at Robins, Kaplan, Miller & Ciresi LLP that represented Eolas.

HIGH STAKES

Earlier this month, Judge James Zagel of the U.S. District Court for the Northern District of Illinois upheld the $521 million verdict against Microsoft, saying jurors were correct in determining that the company had infringed on patents held by the University of California and Eolas, which jointly hold a key Web browsing technology patent.

The judge also suspended an injunction that would have required Microsoft to make changes to its programs, pending the outcome of the patent office's reexamination of the patent.

The stay, the patent office's inquiry and pressure from software developers that depend on Microsoft's products, likely prompted the company's decision to hold off on making changes, said Richard Horning, an intellectual property attorney with Tomlinson Zisko in Palo Alto, California, who has no stake in the trial.

There's big money at stake here and Microsoft is playing tough, Horning said, They're doing it because they can.

Microsoft had said it has been working with rival makers of Internet programs, including Apple Computer Inc., Macromedia Inc. and RealNetworks Inc. on how best to respond to the challenge. Those companies make the widely used Quicktime, Flash Player and RealPlayer media applications.

Microsoft spokesman Jim Desler said Microsoft would appeal the judge's ruling.

Lueck, the lawyer for Eolas, said his client was still open to a settlement with Microsoft, which holds more than $52 billion in cash.

They've managed literally to make billions of dollars and protect their Windows empire by using this invention, Lueck said. (Additional reporting by Eric Auchard in New York)
Source: Reuters