A Pyrrhic Patent Victory

Eolas technologies' plug-in win may prove costly.

The story of the little guy beating the big guy has long been a favorite, dating from David and Goliath. But what if David, instead of using a sling and stone to bring down Goliath, used a nuclear weapon to kill not only Goliath but also Davids allies, as well as the innocent bystanders? And what if somehow Goliath survived the attack, leaving only the innocent as victims? There would probably have been less cheering for David.

Something close to this scenario may be playing out in Internet patent law. Recently, a Chicago federal court found against Microsoft in a patent violation case brought by tiny Eolas Technologies, which claimed that Microsofts use of embedded plug-ins in Internet Explorer violates a patent Eolas received in 1994. The jury awarded Eolas $520.6 million, and Microsoft is appealing the decision.

Most coverage of the case has focused on the little guy beating the big guy. Fueling this kind of coverage were statements from Eolas claiming it will use the patent to break Microsofts monopoly and reinvigorate the browser as an operating system replacement.

But the real victim of this lawsuit isnt Microsoft. Its Macromedia, whose ubiqui- tous Flash technology is at its best when embedded in Web pages. Its alternative browsers, such as Konqueror, Mozilla, Opera and Safari, which use application plug-ins. Its developers who create embedded Java applications for Web pages, who will have to develop applications differently. Its multimedia applications such as RealOne and QuickTime. And it is regular Web users, who may soon find that many of their favorite Web pages will no longer work the way they used to.

The World Wide Web Consortium is concerned about the effect of this patent on standards and the Web itself. It held a meeting after the court decision was announced and has started research and a mailing list to investigate the patent.

The list participants have been quick to point out the weakness of the patent itself, listing a number of examples of prior art that did the same thing and noting the obviousness of the patent. This has led to a lot of discussion about why Microsoft, one of the most powerful and richest companies in the world, couldnt defeat this patent in court. This is tough to figure out. It could be that Microsofts stable of high-priced lawyers messed up. Or maybe the judge and jury had no understanding of technology and patents.

A darker theory is that Microsoft didnt want to employ tactics that would undermine its own shaky patent portfolio. An even more paranoid—yet still plausible—reading of events is that Microsoft wanted to lose. After all, Microsoft spent $150 million to kill Netscape on the Mac. Spending $520 million to damage its Web and multimedia competitors would be a relative bargain.

Microsoft has announced its implementing changes to avoid violation of this patent, which will almost certainly reduce the functionality of Internet Explorer. This will be another in a long series of steps that Microsoft has taken that reduce the capabilities of its Web browser.

Microsofts eventual goal is to roll many Web capabilities into its applications and operating systems. If the browser ceases to be a place where interactive applications are possible, people may turn to interactive Internet applications that are embedded in Microsoft applications.

A stretch? Perhaps. After all, Microsoft hates to lose anything—and is appealing this decision. But in a worst-case scenario for this patent, Microsoft will come out just fine while competitors such as Macromedia, Adobe, Mozilla, Java and others will be severely damaged.

Eolas has made it clear that its main target is Microsoft. But Eolas has refused to say whether it would also go after other companies, users and technologies.

In the meantime, it will probably be a couple of years till the appeal is completed. This will force many companies to make changes now to avoid problems down the road. It does not look like a good two years for interactive Web technology.

Way to go, David.

Discuss this in the eWeek forum.

Jim Rapoza can be contacted at jim_rapoza@ziffdavis.com.