March 2, 2005 5:03 PM PST

Appeals court revisits Eolas decision

update A federal appeals court partially reversed a lower-court decision that had exposed Microsoft to $565 million in damages.

The patent infringement case, brought by the University of California and its Eolas Technologies spinoff, had riled the Web over potential ripple effects that could have forced changes in millions of Web pages that use plug-in applications like Macromedia Flash and Adobe Acrobat that run inside the browser.

Both sides claimed victory in the mixed ruling, which reversed part of the lower-court ruling, affirmed other parts of it, vacated the decision as a whole and sent it back for a new trial.

"We cleared most of the serious issues, so I would consider this a victory for the university," UC spokesman Trey Davis said. "On the issues that would have mattered most to Microsoft, they lost."

Microsoft said that, on the contrary, the company had won on the most important points, particularly its claim that UC's patent was predated by similar technology by artist and software engineer Perry Pei-Yuan Wei.

"It's a huge victory," said Andy Culbert, Microsoft's associate general counsel for patent litigation. "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. We are looking forward to establishing the invalidity and unenforceability of this patent when the case is remanded."

The appeals court said the lower court had incorrectly kept Microsoft from showing the jury the Viola browser. That browser was written by Wei in 1993, a year before the filing date of the UC patent, when he was a student at the University of California at Berkeley.

According to Microsoft, Viola constituted "prior art," or technology both older than the patent and similar to what it claims. A finding of prior art can invalidate a patent.

But the jury in the lower court didn't hear about Viola because district court Judge James Zagel ruled that Wei had "abandoned, suppressed or concealed" his browser, therefore invalidating it as prior art.

The appeals court on Wednesday ruled that because he showed the browser to a group of Sun Microsystems engineers, Wei couldn't be said to have suppressed or concealed his work. The appeals court also said Wei's posting of a new version of Viola did not constitute "abandonment," as the district court had ruled.

The appeals court reversed the lower court's decision that Viola didn't anticipate the UC patent, sounding a testy note in sending the issue

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See software patents are no good.
I don't know if Eolas was short ended with this decsision, but software patents just don't work.

I mean by this that one court says the patent is valid, then another court says its not. If a patent if filed then it should be valid. If the idea is not a valid for a patent then it should have never been granted. Maybe the patent office is over worked and can't do it's job, but I only see that the system doesn't work.

I'm sure that patents hold some validity in some part of the comerce world, but not in software.
Posted by System Tyrant (1453 comments )
Reply Link Flag
If software was patentable from the beginning...
... there would be no computer industry as we
know it today. Each evolutionary step in the
development of software would be predicated on
royalties or waiting on expiry of the patent. In
the pathological case, for the first 17 years
everyone would pay a penny for incrementing a
number, another penny to instruct the machine to
do it in a register variable, a penny (or 17
years) to implement a stack, etc.

Every piece of software has two things in common:
it is dependent on software produced before it,
and it is no more than expression of a logical
series of thoughts. Complexity in software comes
from taking simpler functions, then defining a
new function that adds a small amount of logic in
combination of them. Ultimately, after enough
iterations, you have expressed a very complex
series of logical steps and instructions -- but
the fact remains you've done nothing but record a
thought process in a machine-readable form.

At least in the US, we have laws that cover that
sort of thing, and they are called copyrights.
Copyright makes more sense, since, unlike patent
law, their is a standard that requires a certain
threshold of creativity and expression, and it
permits for their to be independently derived
works that are similar.

But copyright, particularly modern copyright,
falls apart too when applied to software. The
process itself cannot be said to be committed to
a fixed medium (as copyright requires), only an
expression of it. Additionally, when you do
record software to a medium, it is, in fact,
indistinguishible from a very large number (also
an arbitrary series of bits). It doesn't make
sense that people can claim ownership of a number
(or collection of numbers). Worse, software has a
viable commercial life of only a few years, yet
copyrights could easily extend over 100 years,
and patents for 17 years.

What if we patented addition? Then, as that was
about to expire, multiplication? How about
floating-point arithmatic? How many cycles of
waiting for patents to expire on the most basic
of software algorithms would it take to get as
far as Windows XP? If the code that was in CP/M
were patented as it may be possible to do today,
chances are we would just now be seing MS-DOS.
Posted by Gleeplewinky (289 comments )
Reply Link Flag
Another thought
As far as the software industry goes patenting an idea doesn't create innovation. Two people can have the exact same idea, but two very different ways to implement it. For example Windows, Linux, Mac OS, and any other GUI based OS. Although some patented ideas I have seen are pretty detail in their making, most are not.

I would be interested to hear from companies like Microsoft, IBM, and Novell how patenting ideas furthers creativity and innovation. I would like them to explain to me why we need anything more than copyrights for software. I would like someone to explain to me how patenting an idea that stops someone else from creating a competing software product is good for competition.

I don't think these are unreasonable question.
Posted by System Tyrant (1453 comments )
Link Flag
Very well said
Very well said. This is exactly the case. It's only becuase our govenrment has transmorgified from a deomcracy to corptocracy / plutocracy that ability to express thoughts fluidly in code is being "given" to large corporations by the state.
Posted by asdf (241 comments )
Link Flag
Irregardless of every point made in the prior comments, the fact remains that without patents, those people who work their ***** off to make that software (?very long numbers?), deserve to get the money made from its sale. That?s the problem with open source. Why work on it if you aren?t getting paid? Red Hat doesn?t create a fifth of what it sells, yet it?s getting rich, while those who created the stuff they?re selling don?t see a dime. If that?s the system you like, move to china or north korea or some other ?fair? country (communist). Capitalism is about making money, and that can?t be done if no one?s getting paid. I understand that it can be maintained without those particular people making money (programmers), but after a while, they may stop writing code if they?ve nothing to show for it. That said, I?m assuming most of those reading this fall under that category.
Posted by mortis9 (370 comments )
Reply Link Flag
Predicated on a FALSE ASSUMPTION
Your assertions are clearly predicated on the idea that, somehow, 'Patents' provide revenue to 'software-writers'. This is, as you say, "...nonsense".

Currently, 'software patents' are, in fact, being used for little more than stifling competition, and attempting to extract revenue from obvious evolutions of 'basic-concepts'.

Writing software is a practice of constructing a functional-whole out of basic-components. Just as producing ANY other form of creative-construction is.

And, legally, this type of 'creation' is supposed to be specifically excluded from the 'Patent' process (in much the same way that a 'writer' cannot 'patent' starting a sentence with the word "The", ...because such a use is simply a basic part of the general process of creating literary-works which might be utilized by any writer).

Furthermore, nothing in the 'patent' arena has anything to do with 'piracy', ...or achieving reasonable compensation for the work of producing, and selling, a product (those aspects are protected by 'copyright' and 'property' laws).

And finally, few are so stupid as to fear the tired accusations of "...communism", or the assertion that, somehow, without COMPLETELY-UNREASONABLE levels of CONTROL being handed directly to a small, but powerful group of currently-successful businesses, ...ALL creativity and production will somehow, magically, ...cease.

Such, childish arguments might have had some sway, when certain so-called "IP-industries" started making them, ...but MOST people have long since figured-out just how ridiculous such statements are.
Posted by Gayle Edwards (262 comments )
Link Flag
You are right, it is nonsense
Every thing you said was nonsense. Well done!

Just because a program is proprietary doesn't mean it uses patents. Copyrights protects them, along with whatever license they use to restrict users further.

Plenty of people make money in open source. You think Linus Torvalds has made nothing from Linux? Sure, a lot of people volunteer their time to help out projects, and there is nothing wrong with that.

You make the mistake that open source is no cost. That is untrue, you can charge for open source if you want, just like you can give away proprietary software for free.

As was noted, your communist comments are juvenile and completely without merit. Patents are not needed in software, they are used for one thing, and one thing only:

stifling competition.

Now tell me, how is that capitalistic? I don't care what it is, any patented software would never have existed if the pioneers of the software industry had patented their ideas. Patents are cannibalistic. They take the work of what others have done and shared with the world, package it up and try to claim it as their own and try to stop anyone else from using it.

Imagine if the first graphical word processor was patented, or the first web browser. Where would those types of programs be today? How many years set back? The reason computing has advanced as far and as fast is through the sharing of ideas.

Where would computing be if George Boole had patented his work in mathematics? Where would the world be if Newton or Liebniz had patented their ideas? In fact, both independently invented differential and integral calculus. The advancement in mathematics that calculus brought is a huge reason why technology has advanced so much since their time. Their ideas, were built on others work, and so on. Innovation never happens in a vacuum, patents are anathema to innovation.
Posted by Bill Dautrive (1179 comments )
Link Flag
off topic but it has to be said
the term is 'regardless' or 'irrespective' NOT 'irregardless'. no such word dammit...ok i feel better.
Posted by tlite722 (160 comments )
Link Flag
What if you invented the plugin?
Too many people comment without researching the history. (I'm not affiliated with Eolas BTW... all this info can be found on Google).

Eolas started from research in UC to allow the visualization of medical data in a web-browser. Unlike submarine or fraudulent patents, they actually did create the technology and tried to commercialize under Eolas it after licensing it from UC. Their product was called the Webrouser.

Now think about it. Microsoft owned the OS market, Netscape owned the browser market... and you come up with a browser with a plugin... WHAT is the strategy? Obviously the browser itself was inferior Netscape and IE. The obvious strategy is to license it to Microsoft or Netscape... now if not for patents... what protection do you have??

We've seen exactly what WOULD'VE happened as what did happen, they both decided to ignore Eolas and
copied the technology.

So think about it.. if YOU developed some really innovative technology, are you going to say.."here microsoft, take it and leave me with nothing?"

Look, please don't extrapolate software patents to silly ideas such as "ooooh.. if we patent software, we can patent the XOR, NOR or addition/subtraction routines" that discussion is not relevant to this topic... Eolas developed a sophisticated technology out of years of UC research and just because it is a widely used technology, doesn't mean it shouldn't be patentable. (You KNOW you're paying Phillips a few cents every time you buy/burn a DVD for their patents don't you?)

BUT, if Pei Wei's browser predates, the patent... then so be it.
Posted by (5 comments )
Reply Link Flag
A thought
Phillips is a hardware patent. As far as I know Hardware isn't covered by much of anything else. Eolas has a copyright on the software. They can still licence it to other people. Microsofts is winning this case proving that patents don't work. My opinion is that Microsoft should have to pay. I think that if a patent is accepted that make is true. I know there are a lot of holes in that theory.
Posted by System Tyrant (1453 comments )
Link Flag
Yes, but my point is that Philips doesn't manufacture the DVDs either either.. people like Memorex license the patents so they can manufacture the DVD's... It really isn't hard to reverse engineer a DVD (even if the spec had been proprietary) , so if Memorex had their way, they could EASILY reverse engineer the DVD and make it them themselves.

In the hardware world patents are considered a cost of doing business, most products are protected by patents and the price factors in a few cents that go to the patent holder. I don't see why it should be different in the software world. Microsoft makes bloody huge magins on their software, a few cents wouldn't have killed them... they just chose to play hardball in this case.

What makes hardware different from software that took years to research and develop? Sure software is protected by copyright, but as we saw, apparently bigger companies prefer to copy or develop the thing internally once they know that it works.

Eolas/UC invented the technology and prove that it works, now the big companies want to use it but not license the core software... what are companies in Eolas' position to do if not for patent protection? (How are you going to argue that copyright works in this case?)

Sure there are some aspects of software patents (ie. business method patents) that I have issues with but I think the concept of software patents itself isn't flawed.
Posted by (5 comments )
Reply Link Flag
Meant to reply to the previous comment
Posted by (5 comments )
Link Flag
You are missing a few things
First of all, the concept of being able to attach code to other programs has been around for decades. This is nothing unique, nor did they invent it.

Secondly, it is not a 'technology'. Software is merely a collection of execution statements for hardware. Everything in their claims is directly built on what others have done, and shared with the world. Why should they exclusively benefit from work not their own? When it comes right down to it, there is no fundamental difference between a word processor, operating system or even chat room. Sure it takes longer to write a OS then it does to write a chat room, but the difference is just like that of a novel( or perhaps a series of novels) and a short story. One is bigger then the other, but both are merely a collection of words that tells a story.

Hardware is a tangible product. Software is not. At least no more then a novel is. You can design and build digital circuitry, software is really no different then a letter written on a word processor. It is true that all digital circuitry are built from the exact same basic logical gates(NAND and XOR more often then not), but it is still different from software. The basic building blocks: flip-flops, multiplexors, encoders, adders, latches, are built into larger, but still basic components(ie registers). But the end product can be far different, but yet a processor can be patented and someone else can still design and build their own processor. Software is different. Being able to patent a dynamically linked library, executable or whatever is like getting a patent on a NAND gate. What is next? Patenting TCP/IP?

Software patents are illegitimate, period.
Posted by Bill Dautrive (1179 comments )
Link Flag
comment from a patent lawyer
I've read an analysis of the appeal court's decision. The likely outcome of the retrial is that MS will prevail and that the EOLAS patent will be found invalid and unenforceable.

Because the inventor on the EOLAS patent knew about the Pei Wei prior art, he had an obligation to disclose the Pei Wei prior art to the Patent Office while his application was pending. Because he "fox-holed" the prior art, the court will punish him by declaring his patent unenforceable. As it should.

The thing to be afraid of is that EOLAS will settle the lawsuit by giving MS a cheap license under the patent. This will eliminate MS's incentive to pursue having the patent declared invalid and unenforceable. Then EOLAS can assert its patent against other companies who may not have the resources to pick up where MS left off.
Posted by jeroethel (17 comments )
Reply Link Flag
Root for M$
One of the few times people should root for Microsoft to prevail, lol.
Posted by Rusdude (170 comments )
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