Few celebrate this defeat for Microsoft

By Hiawatha Bray, Globe Staff, 9/22/2003

Some people are never satisfied. For years, the enemies of Microsoft Corp. have been praying that somebody, anybody, would finally pin the giant software company to the canvas. And now it's happened, at the hands of a tiny, hitherto unknown outfit in Wheaton, Ill. Yet hardly anyone is celebrating. You'd think the entire software industry, with a single voice, would sing hosannas to Mike Doyle, founder of Eolas Technologies Inc. In a federal court in Chicago last month, a jury ordered Microsoft to pay Eolas more than half a billion dollars in damages.

Considering that Microsoft fought the entire US Justice Department and 20 state attorneys general to a draw in its antitrust case, Eolas's success is little less than astounding.

So why no ticker tape parade? Because this isn't an antitrust case; it's a patent dispute. Microsoft was found to have violated an Eolas patent governing the way Web browsers interact with Web pages that contain embedded software.

But other software products, including competing browsers like Opera and the new Safari browser from Apple Computer Inc., could also be in violation of the patent. Safari, by the way, is based on free browsing software created by the open-source programming community, and sure enough, these open-source products may also fall afoul of the Eolas patent.

In short, there's no reason for Doyle to stop with Microsoft. A host of major and minor software powers could find themselves in the dock, right alongside the Beast of Redmond.

Doyle is happy to let them sweat.

"I think it's up to other companies to look at the patent," he said, when asked who he planned to sue next. "The companies that need licenses here know who they are."

To understand the dispute, visit the Yahoo Games site and play a little game of checkers. Your browser will start an embedded Java program that displays a checkerboard on your screen. Microsoft's browser includes code that makes it all work.

But Doyle says he helped to invent the technology during his years at the University of California. The university patented the software in 1994, and granted Doyle's company, Eolas, an exclusive license. The jury ruled that Microsoft should have licensed the patent from Eolas. Microsoft didn't, and now the jury says the software giant must pay.

Microsoft claims it was saddled with a judge who Just Didn't Get It. And for once, Microsoft's rivals agree. Sun Microsystems Inc. has waged a pitched battle against Microsoft for years over Sun's Java software.

But Simon Phipps, Sun's chief technology evangelist, has said that an Eolas victory "threatens the very fabric of the Web." Ray Ozzie invented IBM Corp.'s Lotus Notes, the groupware software that competes against Microsoft's Exchange. But he's also gone to bat for Microsoft on his weblog, laying out his reasons for tossing the Chicago ruling.

At the heart of Ozzie's argument, and Microsoft's appeal, is the patent attorney's concept of "prior art." Simply put, you can't patent a technology that was already in use when you filed for the patent. Ozzie says that he was using the Eolas technology in Lotus Notes long before the patent was filed.

Too bad Microsoft didn't know this when it went to trial. Still, the company had evidence that the disputed browser technology was in two other software products before the Eolas patent was filed. But the judge refused to let the jury see much of this evidence.

"The judge decided that as a matter of law, no reasonable jury could find in their favor," said Eolas's Doyle. "That decision was taken out of the hands of the jury."

Doyle implied that the prior art evidence was worthless, but Michael Wallent, general manager for the Windows client platform team, blamed a curious technicality. Microsoft tried to introduce vintage 1993 software as evidence of prior art, but couldn't prove to the judge that the software really had been written in 1993. So he disallowed it. Wallent figures this is a good basis for an appeal. He's also hopes Microsoft can bolster its case with Ray Ozzie's claims.

Of course, Microsoft could just pay the fine. Considering the company's $40 billion cash hoard, half a billion is no biggie. Doyle says he'll take the cash, along with interest, and grant Microsoft a license to the software. Wallent reacted with scorn. The disputed software takes up a mere 305 lines of code in Windows, which contains 56 million lines of code in total. Yet the court ordered Microsoft to pay Eolas $1.47 for each copy of Windows sold.

"That would mean that one copy of Windows, by their math, should cost $506,000," said Wallent.

Microsoft may at least be able to avoid paying patent fees on future versions of Windows. The company is hard at work on modifications to the browser that will bypass the controversial code. And contrary to widespread rumor, both Microsoft and Eolas say that such modifications will not cause millions of Web pages to malfunction.

"This is not the end of the world," said Wallent. "It's an inconvenience."

Microsoft may even be able to reduce the court case to a mere nuisance. It might win on appeal, after all. And there's always the chance of an out-of-court settlement.

But none of that will help all of the other software makers who could be next in line for an Eolas lawsuit. A settlement might even hurt them, by setting Microsoft's seal of approval on the patent claim. That's why Mike Doyle and his lawyers are the only ones enjoying his victory.

Hiawatha Bray can be reached at bray@globe.com.