Microsoft, Eolas Settle: It's Still Cheaper To Pay Up Than Fight Bogus Patents

from the such-is-life dept

Microsoft and Eolas have been involved in a patent infringement lawsuit for many years. Eolas claims a patent on the concept of embedding other applications within browsers -- basically for the concept of plugins. This patent was questioned by many people who note that plugins are a pretty common concept and it hardly seems reasonable to give a monopoly over that idea to one company. In fact, none other than web inventor Tim Berners-Lee showed prior art for browser plugins, and the Patent Office suddenly started saying that it may have made a mistake in granting Eolas the patent. Unfortunately, due to the ridiculously complicated process to get the USPTO to review a patent, it was eventually ruled that the patent could be valid. However, it recently had agreed to review the patent again.

Of course, as we've learned time and time again, since this process is so long, and the risk of losing gets costlier and costlier the longer you wait, it appears Microsoft has given up invalidating this highly questionable patent and has simply paid off Eolas in a settlement. The amount isn't defined, but Eolas is gleefully telling its shareholders to expect a dividend shortly. Once again, this highlights nearly everything wrong with the patent system and why it needs to be changed. A very broad and vague concept with plenty of prior art gets patented by a small firm that doesn't actually do anything. Then it holds up a large company that is actually offering a product to the market, and forces them to change their product, taking away functionality, while trying to collect hundreds of millions of dollars that could have gone towards further innovation. On top of that, it highlights how difficult, slow and convoluted the patent review process is that makes it so difficult to actually contest these questionable patents. In the end, it's often just cheaper to pay up, diverting money from actual innovation into the legal system. What a shame.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Joshua, Aug 30th, 2007 @ 6:38pm

    How to stop litigation on bogus patents:

    It's really simple, if any patent you have is invalidated, you must refund all licenses for that patent with interest (something like 50% per year).

    If you litigate against a company that claims your patent is not valid, you better be damned sure you are not just trolling because that $10,000,000 profit you got could be turned into a $20,000,000 debt.

     

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  2.  
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    davidm, Aug 30th, 2007 @ 7:54pm

    or else

    if you own a patent, you want to sue a large company. once they pay up, the patent is validated, and the patent owner's claims are stronger in court. this is also a win for the company that caves (MS in this case); there may even have been some sleazy back room agreement. they now own the right to use a 'proven patented technology,' while others will have to go through the pain and suffering or perhaps get shut down.

     

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  3.  
    icon
    boomhauer (profile), Aug 30th, 2007 @ 8:48pm

    where

    oh where has my america gone to?

     

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  4.  
    icon
    slimcat (profile), Aug 30th, 2007 @ 8:52pm

    Re: or else

    there may even have been some sleazy back room agreement. they now own the right to use a 'proven patented technology,' while others will have to go through the pain and suffering or perhaps get shut down.

    Certainly would be a cheap and easy way to get rid of that pesky mozilla-firefox.

     

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  5.  
    identicon
    angry dude, Aug 30th, 2007 @ 9:23pm

    Mike, just give it up already !!!

    As usual Mike is full if it

    Eolas patent is actually owned by the University of California

    Evil evil patent trolls - US universities

    Poor poor MicroShit

    Mike said so

     

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  6.  
    identicon
    Anonymous Coward, Aug 30th, 2007 @ 11:10pm

    Re: Mike, just give it up already !!!

    By reading the links to seatlepi, Eolas is stated as being a privately held company, a University of California SPIN-OFF... which is not exactly "The University of California" as you call it.

     

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  7.  
    identicon
    Anonymous Coward, Aug 30th, 2007 @ 11:44pm

    Patent is owned by the University of California

    from Cnet news:
    "...The patent in question, owned by the University of California and licensed exclusively to its Eolas software spinoff,..."
    So the patent is most likely owned by the University of California. I would be ashamed if I were representing the University.

     

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  8.  
    icon
    Mike (profile), Aug 31st, 2007 @ 1:10am

    Re: Mike, just give it up already !!!

    Evil evil patent trolls - US universities

    Did I call them patent trolls? No. I just pointed out that there's plenty of prior art on a fairly common idea, and the patent never should have been granted.

    You're the first one to suggest that they might be trolls.

     

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  9.  
    identicon
    Anonymous Coward, Aug 31st, 2007 @ 6:17am

    now with MS help they can go after other browsers

     

    reply to this | link to this | view in thread ]

  10.  
    identicon
    DAR, Aug 31st, 2007 @ 6:23am

    Re: How to stop litigation on bogus patents:

    It's really simple, if any patent you have is invalidated, you must refund all licenses for that patent with interest (something like 50% per year). If you litigate against a company that claims your patent is not valid, you better be damned sure you are not just trolling because that $10,000,000 profit you got could be turned into a $20,000,000 debt. ... at which point you just put your little company into bankruptcy (since it doesn't actually have any legitimate business other than patent trolling anyway) and start a new patent troll business - without having ever had to pay a dime in damages or penalties. Problem solved. Face it - patent trolling is a business with all upside and no downside. Maybe I should have gone to law school ...

     

    reply to this | link to this | view in thread ]

  11.  
    identicon
    fact checker, Aug 31st, 2007 @ 8:17am

    Re: Patent is owned by the University of Californi

    According to the PTO's own records, the patent in question, U.S. Patent 54383096 is owned by the University of California.

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    John Bergman, Aug 31st, 2007 @ 8:56am

    Re: Mike, just give it up already !!!

    Evil trolls my ass! if the technology was not developed by the University or the federal government the tech world would be in slow motion. Thousands of hours were spent developing plug-in and applets so large programs can function with the limited power of the computer. The developer deserves to get paid for their effort. Because of this effort billions of dollars have been earned by those who use it. Why don't you create something.

     

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  13.  
    identicon
    John Bergman, Aug 31st, 2007 @ 9:10am

    If your ever sick, it works

    The Eolas technology is a working product. It was developed for the imaging human body. It allows doctors to click onto image and view it from different angles. If you need it, it works.

     

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  14.  
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    Joe Smith, Aug 31st, 2007 @ 11:37am

    prior art

    One of the disturbing things about the Eolas case is the fact that the judge at the first trial excluded the evidence of the prior. In NTP v. RIM prior art was also excluded. The exclusion in the RIM case is justified on the basis of what was viewed as wrongful conduct by RIM (but was probably just a mistake / misunderstanding). The result in both cases was that the jury decided on the basis of a pretend set of facts and not on what really happened.

     

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  15.  
    identicon
    angry dude, Aug 31st, 2007 @ 12:10pm

    Joe Smoe

    Joe, you shoul sell used cars - you are so good at lying

    In NTP vs. RIM case judge specifically instructed the jury to disregard the court demo by RIM attorneys because the whole demo was falsified

    Unfortunateluy patent cases are not like criminal cases - nobody goes to jail for contempt of court
    Too bad

     

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  16.  
    identicon
    Joe Smith, Aug 31st, 2007 @ 1:03pm

    Blind anger

    In NTP vs. RIM case judge specifically instructed the jury to disregard the court demo by RIM attorneys because the whole demo was falsified

    That is not what happened and you should know it.

     

    reply to this | link to this | view in thread ]

  17.  
    identicon
    Anonymous Coward, Aug 31st, 2007 @ 4:08pm

    What a bunch of crap. Its stupid stuff like this that puts America at a disadvantage against developing nations. I bet you wouldn't find bullshit like this in India. One day they will surpass us... and then probably fall into this kind of crap.

     

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  18.  
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    Cimarron Taylor, Sep 2nd, 2007 @ 7:05pm

    Disappointing

    Pei Wei and a few students at UCB (mostly people from the XCF, the same group that created the Gimp) created Viola - the first browser that supported plugins. Given that earlier non-internet browser-like programs had supported the same concept for years nobody who saw it thought of it as something worth patenting.

    Michael Doyle and a different group of UCB students saw the opportunity and created an overly broad patent which the USPTO granted when they should not have and gave the UCB a piece of the action to lend ligitimacy to their bogus claims.

    None of the actual technology any of these people is significant. What did matter is they made their claims at a critical moment when the browser "platform" was beginning to be adopted by businesses, and they made those claims in a manner which convinced our government to grant them a overly broad monopoly (aka a patent).

    Snookering the government in this way is nothing new.
    Lehland Stanford and others in an earlier era became enormously wealthy by convincing the government to grant the land they needed well before they did any actual development. Michael Doyle and the Eolas gang were just trying to do same thing.

     

    reply to this | link to this | view in thread ]


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