Microsoft Nailed by Software Patent

An anonymous reader writes "It was just announced that Microsoft lost the case where it was accused of violating Eolas' patent on embedded applications in the Internet Explorer browser. They have been fined $521 million in damages."

Comments

It's amazing..

[Plix]

A little patent-portfolio company did in one suit what the Fed couldn't in 5 years.

Re:It's amazing..

[ar32h]

Eolas is not a patent profolio company by a long shot, they are a pure R&D company.
You can see some of the things thay have patented here.
I seem to recall a article where the founder of Eolas was talking about a patent war against Microsoft, not because they wanted royalties but because they objected to the I.E.ization of the web.
Notice that Eolas is going after Microsoft, not Sun or Mozilla.
Standard practice for patent profolio companies is to prey on the weaker first. Eolas went after the main standard breaker with their lawsuit. I think this should give us some hope about Eolas's intentions.

Re:It's amazing..

[Malcontent]

What is interesting to me is that MS already settled with AOL for over 700 million for what they did to netscape. If this verdict stands (and god knows MS can drag it out forever and has friends in very high places) it will have cost MS over a billion dollars to gain dominance over the web.

I wonder if they feel like it was worth it. Billion is pocket change to MS but still it would have been cheaper to just license the patent.

Re:It's amazing..

[kcbrown]

Eolas is not a patent profolio company by a long shot, they are a pure R&D company.

The truly important question is whether or not the company actually produces anything. If they do, then they're vulnerable to a countersuit involving patent infringement.

"IP" holding companies are some of the most dangerous creatures in the technological world today. The reason is simple: the traditional way the patent game is played is that most companies would collect patents for use as a defense against patent infringement suits. When the inevitable suit happened, they'd break out their own patent portfolio and, hopefully, find at least one that the company suing them was infringing. Both companies would agree to cross-license their patents and life is good again.

Companies that don't have a patent portfolio are at a disadvantage in that game, of course, but the upside is that patent infringement suits were relatively rare, so one could do development work in relative peace. Only if you were wildly successful as a result would you face an infringement suit, and at that point you'd generally have the ability to pay for a licensing arrangement -- unless the initiator of the suit was a competitor (as was the case in, e.g., Amazon vs. B&N). The overall system wasn't perfect, of course, but it worked well enough. Certainly free software was reasonably safe from such suits because there would be no money to be had from such a suit.

Enter the "IP" holding company. The problem with such a company is that there is no defense against them. The traditional method of cross-licensing doesn't work because such a company doesn't infringe on any patents. It can't, because the company itself doesn't actually make anything. As often (probably more, actually) as not, these "IP" holding companies don't even invent anything. Their sole purpose in life is to suck money out of companies that do invent and build things. That can include any company that does a lot of free software work, like IBM and RedHat.

I think these "IP" companies are among the greatest dangers our technology-driven world faces today, because there is no effective remedy against them, short of legislation. And we all know how likely it is that that will be of overall benefit.

Re:It's amazing..

[EJB]

I believe they claimed Microsoft violated US patents # 000.000,000,001 (the '1 patent) and # 000,000,000,002 (the '2 patent).

The '1 patents lays out a "way to rule a country comprised of dozens of states" and the '2 patent describes the taxation of citizens of a huge country.

Re:It's amazing..

[Ilmari]

First: If you don't enforce a patent, you lose it. If they get through with MSFT, they have to go after all other browsers.

Bzzt, wrong. It's trademarks you lose if you don't enforce them. Patents can be enforced as selectively as you care, likewise with copyright.

Great!

[freeze128]

This means there will probably just be another IE service pack that breaks more web pages....

Re:Great!

[Mr. Troll]

Yeah, just some other no name company sitting on a patent waiting for someone to do something with it......then skimming profits.....this is the kind of things that killlllls delelopment

Patent whores who just sit around and WAIT for someone to sue.....heaven FORBID they actuall DO anything with their patent.....no, just sit and wait...just like SCO....just like those creeps who screwed EBAY....THIS is the problem with the web today

So Eolas invented COM and ActiveX

[pr0ntab]

I don't think so. Have you seen the invocation of some embedded applets in IE? Nothing like Netscape.

I have my feelings against Microsoft, but this smells like being in the right place at the right time, and PTO's own trademarked brand of ignorance.

Re:So Eolas invented COM and ActiveX

[Greeneland]

There is an interesting paragraph in the cnet article about this case, pasted below: Additionally, the judge in the district court case will hear evidence in the coming weeks on a counterclaim from Microsoft. The software giant said that Eolas' patents are invalid and that an inventor name Pei Wei, who worked at O'Reilly and Associates, came up with similar technology, but at an earlier time. A Microsoft representative said that Eolas knew of his work, which makes their lawsuit inequitable. A quick google groups search shows a number of interesting posts involving Pei Wei.. such as http://groups.google.com/groups?q=Pei+Wei&hl=en&lr =&ie=UTF-8&oe=UTF-8&scoring=r&as_drrb=b&as_mind=12 &as_minm=5&as_miny=1981&as_maxd=11&as_maxm=8&as_ma xy=1994&selm=93020.102722RBNTJC%40rohvm1.rohmhaas. com&rnum=5

Im so confused!!!!!!

[slash-tard]

Microsoft = bad

Patents = bad

So is this good? Must be some sort of paradox if so...

Re:Peanuts

[letxa2000]

That's half a billion dollars. I think Microsoft has, what, 40 billion? You can argue they still have 39.5, but losing about 1.3% of their reserves on a podunk little company with a silly 'ol lawsuit is still an important message.

Like someone else said, that's more than the Justice Department was able to do in 5 years.

hmmm

[Coneasfast]

Patents on the simple idea of plug-ins and applets? This seems almost as ridiculous as the amazon patent on one click purchasing.

Hard to know what to feel.

[MikeFM]

I dislike Microsoft but I still don't see that this helps the development community or users at all. Software patents are stupid and a bad idea.. even when being used against that monopoly we love to hate. Anyone with an interest in the freedom of developers to develop what they want and the freedom of users to choose the best product for their needs can't see this as anything but a loss.

And in other news...

[Scalli0n]

From the article: "Eolas had argued that the technology for "plug-ins" and "applets" made it possible for Microsoft to compete against the Netscape Navigator browser."

In other news, SCO has also sued Mozilla for the use of "HTML" and "JavaScript" which have made it possible to be used by more than one person...

Categories for this article explained...

[pHatidic]

You may have noticed that this article seemingly falls into 7 different categories. Let me break them down for you so you can see for yourself how each one applies to this insightful article.

Firstly, the Bill-Gates-As-Cyborg is representative of Microsoft being fucked.

Secondly, the IE icon with the broken halo is representative of Microsoft falling from grace.

Thirdly, the circuitboard was just misclick by Taco.

Fourthly, the patent pending icon is representative of Cyborg-Bill being stabbed in the back by a rusty spoon.

Fifthly, the hat on briefcase thing also represents Microsoft being fucked.

Sixthly, the internet thing represents my posting this on slashdot about Microsoft being fucked.

Lastly, the newspaper icon represents joe sixpack reading in weekly world news tomorrow that Microsoft is being fucked.

In Summary...

[Anonymous Coward]

Boo: Overbroad Patents!
Boo: This patent is stupid!
Boo: Microsoft in general!
Yay: Microsoft has to pay money!
Boo: It's too little money!
Solution to this:
Yay: Mozilla!
Yay: Slashdot!

Before you start bitching about slashdot users...

[Dalroth]

Before you start bitching about Slashdot user's being hypocrites, keep in mind that Slashdot is a community filled with 1000's of a users who all have very different opinions on everything.

I do not support this ruling, because I do not support patents in any way shape or form. That does not mean the Slashdot community as a whole feels the same.

In fact, it's very hard to determine just what it is the Slashdot community DOES believe, because more often than not it's the negativity that makes it through the ranking system more than anything else.

Some people will call this a great victory for Open Source. I don't. I think it's a travesty, but that's my opinion and mine alone. Other's may or may not agree, but please don't let one person's opinion spoil your view of the entire community.

Bryan

Bad precedent

[Eloquence]

Software patents being enforced are always a bad precedent, no matter against whom. Hopefully, big corporations will wake up to the patent scam, which primarily benefits lawyers and idea pirates. Innovation does not come from patents, according to Cisco's VP of "Intellectual Property". He stated in an interview:

Patents don't stimulate innovation, they capture and protect innovation. My experience at Cisco is that the ability to get patents is not what inspires new developments. Instead, competition has been the major stimulus of innovation at Cisco. Our engineering teams are motivated by the desire to quickly turn their ideas into products and services that customers want, solutions that will help our customers improve their productivity. They don't ask "can we patent this?" before deciding whether to create new solutions.

In order to "capture and protect" innovation, companies register more and more patents each year, often just to prevent others from suing them. But some companies register patents for the sole purpose of engaging in legal warfare -- a risky gamble with potentially huge prizes.

The biggest danger inherent in software patents is to free software. Megacorporations can easily collect thousands of patents on trivial processes to use against open source programmers who have little means to defend themselves. Wait for Microsoft and others to attack on this front -- that would be nice extra FUD fodder with all the SCO crap going on right now. To ignore software patents as Linus Torvalds does is the wrong approach. They must be eliminated entirely.

And Java applets in Navigator are not prior art?

[notAyank]

Can somebody explain this to me? How can this patent exist when in 1998 there were applets / plugins running inside Netscape Navigator doing all the things the patented method does:

1. They were embedded in the "hypermedia" document
2. They could communicate with the browser
3. They could communicate with the server (at least by using sockets and datagrams)
4. By doing this they were "providing the user of the client computer with interactive features and allowing the user to have access to greater computing power than may be available at the user's client computer."

Sorry, but I think MS should be in the clear here.

Link to patent

[dze]

Link to the actual patent.

I'm not much at reading patents but this looks like the usual silly IT patent that could apply to just about anything. Can't see this as a good thing at all.

Re:Peanuts

[TopShelf]

I'm assuming this is a troll, but I'll bite anyway - layoffs occur when structural changes are made to a business. Nobody sees a tangible difference in how Microsoft would do business as a result of this. They'll probably just tie this up in appeals for the next several years anyway, ensuring happy employment for lots of hard-working, blue collar lawyer types...

patent warchests

[mitomac]

IBM, Microsoft, Apple all have giant patent portfolios. When a small company like Eolas can nail microsoft for a patent violation it does not bode well for linux. If IBM can b*tch slap SCO with patent violations regarding hierarchial graphical menus. What is to stop them or any other patent hoarder from making the same claim against linux? Currently, these companies refrain from suing each other because they know the other company likely has patents they are violating...But what ace in the hole patents does linux have up its sleeve?

mitomac

What if this happened to Mozilla and friends?

[raw-sewage]

As much as I like to see Microsoft get slammed, it scares me to think what might happen if these patent-enforcement lawsuits were directed at the open source community. I didn't bother to actually research the details of that patent referenced in this case, but what if Mozilla or Konqueror or another open source browser infringes on the same patent?

Microsoft is a nice target for lawsuits: they're big, visible and have lots of money. However, what if an open source browser had a more significant market share? Wouldn't that same patent-portfolio group come demanding royalties?

This is a more general concern that scares me; it may be tested by the SCO-IBM case(s). Say a company patents some software technology. What if the developers working on that code go home at night and use the same concepts in some open source projects? I emphasize concepts because the developers are smart enough not to copy code, but a patent covers an idea, not a specific implementation.

A lot of this paranoia comes from my co-worker, who is pro-Microsoft and very much anti-open source. He is absolutely convinced that open source is communism, and that it clashes with capitalism. He loves to suggest the above scenario and predict that the GPL will ultimately fail in court...

...because it blocks someone's right to profit. Not only can you not get anything for free in the U.S., but it's getting to the point where you can't give anything away!

Finally, back to Microsoft: don't they have over $40 billion in cash? So $500 million is 1/80th of $40 billion. That's like having $400 and being fined $5. Oh, that hurts. Is anyone here an accountant? How much of that gets written off in taxes? It's really a joke, in my mind.

Of course I don't know the details of the case, but $500 million seems weak. Microsoft has said that IE is now a critical part of Windows. Windows and Office are the only two sources of revenue for Microsoft... doesn't that somehow make IE a critical part of their income stream? And they only got fined five bucks for it?

This is very very bad

[deanj]

I've been following the Eolas lawsuit for a long time now, and this is bad folks.

They basically have a patent on any embedded technology in a browser. A lot of people have looked into this, and so far have come up with nothing. The earliest "application" in a browser technology I'm aware of is Vosaic, but I can't get ahold of anything that shows what date that was originally set up.

This screws Flash, Java applets, and all kinds of other things. Watch for more lawsuits in the future.

Re:This is very very bad

[Hatta]

This screws Flash, Java applets, and all kinds of other things.

Man, this rocks!

No, but Viola probably is.

[chathamhouse]

In 1991, Pei Wei created Viola. It supported extensible plugins prior to 1994.

My objection to most software patents stands. If you're doing something that an expert would consider to be an obvious extension to the current state of the art, you don't have something patentable.

Re:Well, then....

[BobTheJanitor]

More accurately, microsoft is a subset of evil, and patents is a subset of evil. The most that can be said is "Because some evil is microsoft, and some evil is patents, some microsoft may be patents."

One can only dream...

[kcbrown]

As far as I know, Microsoft hasn't ever actually started a patent infringement suit against anyone (examples to the contrary welcome, of course).

That being the case, and given the fact that they lost this lawsuit, there are a number of things that could happen:

1. Microsoft could just pay up and otherwise leave things alone, chalking this up to the cost of "doing business".
2. Microsoft could appeal this all the way to the Supreme Court.
3. Microsoft could push for some type of legislation to reduce the risk of a repeat performance.
4. Microsoft could buy the company that hit them with this suit, along with other similar companies, and then start suing others through their newly-acquired companies.

The interesting question is: which of the above would represent the best thing for the free software community, and how likely is it to happen?

Things obviously don't get any better initially if they cave, though the long-term consequences might be of benefit (if they cave and just pay, then other patent-holding companies will be very much encouraged by that and we'll probably end up seeing many more such suits by such companies, and eventually the big corps will Do Something about the problem, though I suspect the end result will benefit only them and not us).

If Microsoft appeals to the Supreme Court, they can only do so if they have some sort of Constitutional argument. That's not as far-fetched as it sounds, because they can very legitimately question whether or not the patent in question and others like it meets the intent of the clause in the Constitution upon which patent law itself is based. If it weren't for the fact that Microsoft hates to lose and generally tries to win at all costs, I would totally dismiss this as a possibility.

If Microsoft pushes for some sort of legislation, the natural question is what that legislation would look like. My cynical outlook forces me to think that the resulting legislation would somehow raise the barrier of entry for either acquiring a patent or prosecuting a patent so high that only megacorps like Microsoft would be able to participate. Problem solved, along with the problems of these pesky little IP companies and free software types.

Finally, Microsoft could buy the company in question out, but that might be the same thing as IBM buying SCO out as far as end results go, with the end result being that every little upstart IP company will be suing the likes of Microsoft in order to get bought out. If Microsoft has a big enough patent portfolio, then they really don't need to do this and thus probably won't.

I'll bet Eolas is going to get lots of visits from the BSA from now on...

Re:Before you start bitching about slashdot users.

[stickb0y]

I do not support this ruling, because I do not support patents in any way shape or form.

Patents or just software patents?

Software patents are bad because their lifetime is an eternity in the software world, giving them undue monopolistic power. This is exacerbated by the fact that most of the patent examiners don't seem to have the direct knowledge or the familiarity with computing history to differentiate between trivial ideas and really unique, innovative stuff.

(And then there's also the problem of idiots flooding the patent office with ridiculous patents.)

However, the patent system as originally envisioned by the U.S. forefathers was a pretty good idea. It gives inventors an incentive to fully disclose the workings of their inventions to the public in exchange for a limited-time monopoly.

MBA on Microsoft

[mbakaitis]

Having read Slashdot for awhile, and having an MBA in my back pocket, I thought it might be good to point out a few things from a strictly-business point-of-view. (This obviously doesn't invalidate anybody's personal opinion...but it may be considered as an extra data point.)

1. $500+ million is a huge amount of money. People who talk about how this is some "percentage" of Microsoft's quarterly revenues, income, or "war chest" just don't get it. In the end, successful corporations are such because:
   • Making $1 is good.
   • Making more is better.
   • Losing $1 or more is bad.
   Period.
2. Software companies like patents because for two reasons. First, they make it harder for new entrants to threaten them. Second, it protects a position based upon functionality (in many cases) rather than pure technical merit. In each case, it protects a company against its (up-to-now) worst enemies -- other companies.
3. Microsoft would amaze me if they decided to try to weaken patents. Doing so would weaken the vast portfolio of patents they have created or purchased. It would also weaken their ability to use these things, like a club (see #2), against competitors in the future.

I'm not trying to shift discussion away from whether Microsoft's actions were ethical, whether patents are good, or any really relevant and interesting discussions.

However, everything else we discuss here is, at best, philosophy to a creature like Microsoft. When you are talking about $billions in revenue, and if you are trying to "get into Microsoft's head", you need to shift perspective a bit. I, personally, think patents have been abused in many ways in the last decade. However, a company like Microsoft only evaluates things like this on one basis - money. Think like that, and you'll practically be in Bill's head.

tkwww, prior art, and my dance with Microsoft

[chenyu]

I didn't mention this earlier because I didn't want Eolas to win, but I guess there is no harm in mentioning it now.

During the litigation, lawyers from Microsoft contacted me about a program that I wrote in 1992 called tkwww which was an early web browser. The important thing about tkwww was that it rendered images by calling an external application xli.

This was sufficiently close to what microsoft was looking for that a lawyer (who was named Vlad of all things) talked to me about what I did. I stupidly gave him a pointer to a URL through which they downloaded everything, and even more stupidly did not bill them anything at the time.

When I finally came around to sending them an invoice I got some stupid excuse about them might needing me as a witness so that they couldn't pay me anything. I never heard from them again.

The reason I didn't mention this earlier was because I thought that the Eolas patent was silly and I didn't want to say anything that would help them. Now that they won the case against Microsoft, I'd like to let everyone know about this prior art, in case Eolas decided to go against other people.

Re:Amazing grace indeed..

[Alsee]

Ironic is aready an adjective: there is no need to add -al to it.

He was just trying to adjectival it.

-