Ya'll seen this?
FOCUS-Microsoft hit by Web patent infringement suit
(recasts throughout, adds Microsoft comment, interviews with plaintiffs, attorneys, updates stock price, pvs CHICAGO)
By Eric Auchard
NEW YORK, Feb 2 (Reuters) - Microsoft Corp. (Nasdaq:MSFT - news) was sued on Tuesday by a small research and development firm in a patent infringement case tied to key technologies used by Microsoft and other leading Internet software makers, attorneys for the plaintiffs said.
The federal lawsuit, filed on behalf of plaintiffs Eolas Technologies Inc. of Chicago, claims Microsoft's products infringe Eolas' U.S. patent for the technology that makes Web ''plug-ins'' and ''applets'' possible, the attorneys said. Such technologies help give Internet users the ability to download music, video or animated graphics via the Web.
The complaint was filed against Microsoft Tuesday in U.S. District Court for the Northern District of Illinois, Eastern Division by Robins, Kaplan, Miller & Ciresi LLP.
A Microsoft spokesman declined to comment immediately on the complaint saying he had not seen the lawsuit and would need to review it before possibly commenting on the matter.
The suit opens a new legal front for Microsoft as it faces an ongoing antitrust trial in Washington and appeals a federal judge's order backing rival Sun Microsystems Inc. (Nasdaq:SUNW - news) in a dispute between the two over the Java programming language.
The suit asks the court for both unspecified damages from Microsoft for the infringing on the Eolas patent and for an injunction to force Microsoft to cease all future manufacturing, use and sale of infringing products.
Robins, Kaplan, a veteran litigation firm, has tried several high profile patent cases in the past decade, including Fonar Corp.'s (Nasdaq:FONR - news) successful magnetic resonance imaging intellectual property suit versus General Electric Co. (NYSE:GE - news)
The Minneapolis-based firm also was the lead plaintiffs' firm representing the State of Minnesota and Blue Cross/Blue Shield in their suit against major tobacco companies. Martin Lueck, lead lawyer in the tobacco case, heads the Eolas team.
Eolas said in a statement its U.S. Patent 5,838,906 is infringed by Microsoft's Web-enabled software, including Windows 98 and Windows 95, two versions of its core operating system, and Internet Explorer, its browser software.
Eolas said it holds exclusive commercial rights to a patent -- granted Nov. 17, 1998 -- that covers the first browser system to allow small interactive programs, such as ''plug-ins,'' ''applets'' or ''scriptlets'' to be embedded into the graphical Internet software known as the World Wide Web.
The company said in a statement its patent covers a version of such programs from Microsoft known as ActiveX Controls.
The research team that built the system was led by Dr. Michael Doyle, founder and chief executive of Eolas, a privately held research firm with ten employees.
The company, based in a Chicago neighborhood known for its high-technology development work and nicknamed ''Silicon Prairie,'' describes itself as a maker of tools and applications to help make the Web a more interactive medium.
In a phone interview, Doyle declined to comment on whether his company had held talks to license the technology to Microsoft or other Web software developers.
He would not say if Eolas was considering filing similar patent suits against other software developers, which might include Netscape Communications Corp. (Nasdaq:NSCP - news), or Sun Microsystems Inc. (Nasdaq:SUNW - news), makers of other widely used Internet software that also rely on plug-ins or applets.
Doyle said he put together a team in 1994 to create medical imaging software for doctors and medical students that would allow them to send and receive low-cost, three-dimensional medical images and data over the Internet.
Current zMap software from Eolas allows computer users to create what it calls ''imagemaps'' with moving hotspots that follow objects in Web-based animations and video clips.
For example, the software system allows a user to rotate an image of a human body and click a computer mouse to specify body parts and uncover information about them.
Ken Adamo, a partner with law firm Jones, Day, Reavis & Pogue of Cleveland, Ohio, said U.S. courts and juries have become more open in recent years to awarding plaintiffs large verdicts in patent infringement cases.
Adamo, who represents a range of major clients like Texas Instruments and IBM in patent cases, had no specific knowledge of the details of the Eolas charges but vouched for the track record of the plaintiffs' attorneys in such cases.
''Every American jury wants to believe that they have Thomas Edison standing before them,'' Adamo said of the potential for Eolas to prevail, despite the dispute with Microsoft appearing to be what he called ''a true case of David and Goliath.''
Internet patent cases are only beginning to find their way into the courts as the idea that software is patentable has gained legal footing and intellectual property case law in the area has strengthened in the last two to three years, he said.
In heavy trading, Microsoft stock tumbled $5.31 to close at $167.62 Tuesday on the Nasdaq stock exchange amid concerns the government's antitrust case against the company was making headway and a wave of selling in technology stocks.
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