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Surprisingly, Eolas Does Not Own The ‘Net

Texas jury rules
Non-practicing entity
Doesn’t own the ‘net

A jury in the Eastern District of Texas has invalidated two patents owned by Eolas Technologies, a non-practicing entity (a.k.a. “patent troll”) named for the Irish word for “knowledge” and founded by former University of California biologist Michael Doyle.

Doyle’s work for the University led to the two patents at issue:  5,838,906 (the ‘906 Patent) and 7,599,985 (the ‘985 Patent).

The ‘906 patent, granted in 1998, is for a “system allowing a user of a browser program on a computer connected to an open distributed hypermedia system to access and execute an embedded program object.”

The ‘985 patent, issued in 2009, is a continuation of the ‘906 Patent and allows websites to add interactive embedded applications through the use of plug-ins and AJAX (asynchronous JavaScript and XML) techniques.

Eolas claimed that these two patents covered almost all websites with “interactive” features, such as streaming video.

In 1999, Eolas sued Microsoft, alleging that MS’s  Internet Explorer (IE) infringed the ‘906 patent.  Microsoft offered expert testimony in its defense, including from Pei-Yuan Lee, who invented an early browser called Viola.  However, Eolas won a judgment of $500 million in 2003 and MS was forced to make changes to IE.  The award was thrown out on appeal, but MS settled with Eolas in 2007, paying an amount estimated to be in the tens of millions of dollars.

Eolas also used these patents as the basis for infringement suits against other companies.  Some defendants, including Apple and Playboy, paid to license the patents;  others fought in court.

This latest suit sought more than $600 million in damages from Adobe, Amazon, CDW Corp., Google, JC Penney, Staples, Yahoo, and YouTube.

Tim O’Reilly, who worked with Pei-Yuan Lee in the early 90’s, celebrated the verdict in a Google+ post and warned:

The current patent system is a terrible tax on invention, as it requires real inventors to spend time in court rather than focusing on making real things happen. We must remember that the patent system was supposed to “promote the progress of science and the useful arts,” not to enrich people who know how to work the legal system.

The case is Eolas Technologies Inc., v. Adobe Systems Inc., 09cv446, U.S. District Court for the Eastern District of Texas (Tyler).

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