Court Reverses $520 Million Ruling Against Microsoft

WASHINGTON — An appeals court yesterday threw out a $520.6 million jury verdict that found Microsoft had infringed on patents held by Eolas Technologies Inc.

In the case, Microsoft was accused of using Eolas technology to embed and invoke interactive objects, such as applets and plugins, within its Internet Explorer web browser. The decision had could have forced changes in millions of web pages that use plugin applications, such as Macromedia Flash and Adobe Acrobat, that run inside the browser.

U.S. patent No. 5,838,906, which Eolas licenses from the University of California, protects the execution of remote code embedded in hypertext pages. In 2003, a jury found that Microsoft IE had infringed on the patent and awarded damages of $1.47 for each copy on the 350 million copies of Windows that Microsoft shipped worldwide between November 1998 and September 2001.

Microsoft denied the infringement and asserted that Eolas’ patent claims were invalid based on the existence of “prior art” and widespread belief that the technology has been an integral part of the web long before the patent was issued.

Nonetheless, the decision was upheld in U.S. District Court in 2004. Microsoft appealed the ruling to the U.S. Court of Appeals for the Federal Circuit, leading to today’s reversal of the lower court decision.

“It's a huge victory,” said Andy Culbert, associate general counsel of patent litigation for Microsoft. “The essence of our defense was that this patent was invalid, based on the good work done by Pei Wei, and the court of appeals has completely vindicated our assertions.”

Culbert was referring to what he claims is evidence that Eolas did not invest in or contribute to development of the patented technology, and that it was actually developed by Pie-yuan Wei of O’Reilly & Associates, which would substantiate the company’s “prior art” argument.

Despite Culbert’s enthusiasm, Microsoft can claim only a partial victory because the case is being sent back to U.S. District Court for a second jury trial. However, Culbert added that he plans to produce evidence at retrial proving that Eolas knowingly withheld information about Wei’s invention from the U.S. Patent and Trademark Office.

Copyright © 2026 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Final Defendant Sentenced in GirlsDoPorn Case

Former adult producer Doug Wiederhold, previously a business partner of GirlsDoPorn owner Michael Pratt, was sentenced on Friday in federal court to four years in prison for conspiracy to commit sex trafficking.

FTC Takes Another Step Toward New 'Click to Cancel' Rule

The Federal Trade Commission (FTC) is negotiating the latest procedural hurdle in its effort to renew rulemaking concerning negative option plans, after a federal court previously vacated a “click-to-cancel” rule aimed at making it easier for consumers to cancel online subscriptions.

Pineapple Support, Brazzers to Host 'Navigating Relationships' Support Group

Pineapple Support and Brazzers are hosting a free online support group for performers to build and maintain healthy relationships.

Aylo, SWOP Behind Bars to Host 'Deplatforming' Community Panel

Aylo and Sex Workers Outreach Project (SWOP) Behind Bars will host a panel on creators’ rights and deplatforming on Feb. 10 at 3 p.m. (EST).

Adult Trade Group Pearl Industry Network to Debut at Taboo Vancouver

Pearl Industry Network (PiN), a new trade group for the adult industry focused on content creators, will debut at Taboo Vancouver adult lifestyle and wellness expo next week.

New Creator Platform 'OnlyPhones' Launches

OnlyPhones, a new phone-based creator platform, has officially launched.

AEBN Reveals Ariel Demure as Top Trans Star for Q4 of 2025

AEBN has published its top trans stars list for the fourth quarter of 2025, with reigning XMAs Trans Performer of the Year Ariel Demure landing atop the leaderboard.

Rebel Lynn Launches 'PoleVixens' Through Paysite.com

Rebel Lynn has launched her new pole dancing-themed membership site, PoleVixens, through Paysite.com.

Pineapple Support Taps Athena Bellamy as Brand Ambassador

Pineapple Support has named Athena Bellamy as its newest brand ambassador.

AV Bulletin: Health Warnings, VPNs and Exemptions

Since the Supreme Court’s decision in Free Speech Coalition v. Paxton, more state age verification laws have been introduced around the United States, as well as at the federal level and in other countries. This roundup provides an update on the latest news and developments on the age verification front as it impacts the adult industry.

Show More