By refusing to hear Microsoft's appeal, the high court has left the fate of the case in the hands of a lower court.
The case dates back to 1999, when Eolas Technologies accused Microsoft of using patented Eolas technology to embed and invoke interactive objects, such as applets and plugins, within Microsoft’s Internet Explorer web browser. The technology in question protects the execution of remote code embedded in hypertext pages.
A jury in 2003 ordered Microsoft to pay $521 million for infringing U.S. patent No. 5,838,906, which Eolas licenses from the University of California.
The jury found that Microsoft IE had infringed on the patent and awarded damages of $1.47 for each copy of the 350 million copies of Windows that Microsoft shipped worldwide between November 1998 and September 2001.
The decision also would have forced changes in the way applets and plugins such as Macromedia Flash and Adobe Acrobat are embedded into millions of web pages.
However, such actions never became necessary because the U.S. Court of Appeals for the Federal Circuit threw out the verdict earlier this year due to technical issues.
That ruling was only a partial victory for Microsoft, however, because the appeals court did not kill the case outright. Rather, it sent the case back to U.S. District Court for a second jury trial, leaving open the possibility that Microsoft would once again lose and face huge penalties.
In an effort to avoid such a fate, Microsoft had requested that the high court review the way in which damages could be calculated when the case goes back for further proceedings.
Microsoft argued that the lower court was incorrect in basing the award on worldwide sales rather than domestic sales. The company argued that basing the award on worldwide sales is an unconstitutional expansion of the scope of U.S. patents.
The case is Microsoft Corp. v. Eolas Technologies, 05-288.