Lawsuit Q & A

Monday, August 11, 2003

Trey Davis (510) 987-0056

UC, Eolas win verdict against Microsoft in Web browser case;
Federal jury awards $520.6 million in damages

Microsoft Corp. improperly put patented Web browser technology into its Internet Explorer, helping the computer giant to win critical market share from rival Netscape Navigator, according to a verdict handed down today by a federal jury in Chicago. In the U.S. District Court in the Northern District of Illinois, Eastern Division, the 12-member jury found that Microsoft infringed a patent owned by the University of California and licensed by Eolas Technologies Inc., and awarded the two $520.6 million in damages.

“This verdict is a significant landmark in defining and protecting Internet technology whose benefits literally reach the whole world,” said James E. Holst, the university’s general counsel. “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.”

Eolas and the University of California claimed that Microsoft infringed U.S. Patent No. 5,838,906, which was issued to UC on Nov. 17, 1998 and licensed exclusively to Eolas in October 1994. Under the terms of the license agreement, Eolas pays UC for products it makes under the patent and for licenses it grants under the patent.

Technology to deliver and manipulate Web content was burgeoning in the early 1990s. Dr. Michael Doyle, Eolas’ president and former UC researcher, co-invented the patent's technology to allow interactive applications in Web pages, which previously was limited to static information and helper applications. In 1995, the patented technology’s features began appearing in commercial Web browser programs; and interactivity has become a hallmark of the Internet ever since.

“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,” said Eolas’ lead trial attorney, Martin R. Lueck, of Robins, Kaplan, Miller & Ciresi LLP.

The patented technology is a key component of the interactivity available on the Internet today. It allows web page developers to embed interactive programs in Web pages. A browser, equipped with the University of California’s patented technology, is able to deliver that interactivity to the user. For example, the technology is used often with stock information, video players, games, virtual real estate tours and other interactive content on the Web. The patent allows the Web to be a platform for fully interactive embedded applications.

In 1993, as part of UC’s Innovative Software Systems Group, Doyle and his research team were working to transform how scientific information was created, accessed and published. As part of their research, they began to explore the possibility of expanding the sciences by allowing scientists to read not only what was published online but to interact with that data. While early Web participants struggled to implement helper applications, the team was already examining the potential of the Web to become a platform for fully interactive embedded applications.

A powerful engine for economic growth and a vital resource in improving the health of people around the country, the University of California is the world’s premier public research university system, with more than 200,000 students, 150,000 faculty and staff, 10 campuses, three national laboratories and five medical centers.

The transfer of technology and knowledge generated at UC campuses creates a direct pipeline to California’s economy by providing firms with new technologies that have commercial potential and by generating spin-off and start-up companies. More than 160 companies have been founded on the basis of UC technology licensing agreements. In the last decade, UC campuses reported more than 2,600 inventions that led to new technologies and products. UC has been the nation’s leading university in the number of patents developed for the past nine consecutive years.

Eolas (short for "Embedded Objects Linked Across Systems") was founded in 1994 by Doyle and his research group to create and market new technologies and innovative products that make the Web a more interactive medium. Their focus has broadened since then to encompass fields ranging beyond browser technology to areas as diverse as advanced applications platforms, information security systems and bioinformatics.

Robins, Kaplan, Miller & Ciresi LLP, a national law firm with offices in Atlanta, Boston, Los Angeles, Minneapolis, Naples (FL), and Washington, DC, has also been involved in other large patent decisions. The firm’s litigation team in this case included partners Martin R. Lueck, Jan M. Conlin and Richard M. Martinez.

After attorney fees, inventor share and other license-related expenses, UC will have in excess of $50 million from the verdict to use for education and research programs, with the bulk of these funds going to the UCSF campus, where the patented technology was first developed.

For background material, please visit www.rkmc.com, www.universityofcalifornia.edu and www.eolas.com.


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