Company that won $585M from Microsoft sues Apple, Google

Eolas, the company that won a patent case against Microsoft in 2003, has filed another patent infringement lawsuit, apparently targeting as many high-tech companies it could find. Citing infringement on the very same patent as the one that resulted in a $585 judgment against Microsoft, Eolas is now suing 23 companies, including Apple, Google, Adobe, Amazon, eBay, Playboy, Yahoo, and YouTube for implementing browser plug-ins in one form or another, plus another patent that addresses the use of asynchronous JavaScript and XML (AJAX).

The infamous '906 patent granted to Eolas and the University of California was one of the first patents to get the young online tech scene going in 1998. The patent addresses third-party browser plug-ins to run various forms of media as an "embedded program object"—essentially a program that runs within another program. Eolas promptly sued Microsoft for its implementation of ActiveX in Internet Explorer, which set in motion a years-long legal battle between the two companies.

The end result of that legal battle was that Microsoft was found guilty of infringing on the Eolas patent. Although the US Patent and Trademark Office provisionally invalidated the '906 patent in 2004, it later reversed its position and upheld the patent after all. Microsoft made numerous appeals to the decision, but in August of 2007, the two companies announced that they had settled the case once and for all.

Now, Eolas thinks 23 new companies are infringing on the same patent plus a new one that builds upon the '906 patent (known as the '985 patent) that "allows websites to add fully-interactive embedded applications to their online offerings through the use of plug-in and AJAX." The patent was issued to Eolas by the USPTO in October of this year, apparently giving Eolas the confidence it needed to stir the legal pot once again. The company's legal counsel, Mike McKool, said in a statement that the lawsuit will put an end to the "widespread unauthorized use" of Eolas' patents.

"What distinguishes this case from most patent suits is that so many established companies named as defendants are infringing a patent that has been ruled valid by the Patent Office on three occasions," McKool said. "All we want is what’s fair," Eolas chairman Michael Doyle added.

Given Eolas' success litigating the '906 patent and the USPTO's upholding the claim, this particular lawsuit may not be just another patent suit. If Eolas succeeds in court again, it could once again have far-reaching ramifications across the industry. The defendants may decide it's cheaper to enter into licensing agreements than to fight this one.

Lurking in the background is whether software should even be patentable, an issue being reviewed by the Supreme Court. Numerous tech companies have argued that a ban on software patents is necessary in order for them to continue innovating; if the Supreme Court eventually decides that their reach is reduced, it could dramatically affect Eolas' case against these companies.

Further reading:

• Search PACER for case number 6:09-cv-00446 in the eastern district of Texas
• US Patent 5,838,906 covering a "Distributed hypermedia method for automatically invoking an external application providing interaction and display of embedded objects within a hypermedia document"
• US Patent 7,599,985 for a "Distributed hypermedia method and system for automatically invoking external application providing interaction and display of embedded objects within a hypermedia document"