BEIJING, Mar. 4 -- A US appeals court threw out a US$521 million patent verdict against Microsoft Corp and ordered a new trial in the case against the world's biggest software maker.

    The US Court of Appeals for the Federal Circuit in Washington said a trial judge improperly barred a jury from hearing some evidence to support Microsoft's claim the infringed patent is invalid. To win at retrial, Microsoft must successfully challenge the validity of a patent held by the University of California and licenced to closely held Eolas Technologies Inc.

    A federal jury in Chicago found that Microsoft's Web browser, Internet Explorer, infringed a patent for navigating the Internet. The presiding judge, James Zagel, then ordered Microsoft to change its software or stop selling the browser, and the company waited for the appeal before making any changes.

    "It is a decent victory, at least in the short term, for Microsoft," said John Rabena, a patent lawyer with Sughrue Mion in New York. "Based on the evidence that was discussed in the Federal Circuit decision, I would say Microsoft has a pretty decent shot at this."

    Eolas lawyer Martin Lueck said the validity issue is a "narrow question" and he predicted his client would win at retrial. "We believe, even in light of this ruling, that we will prevail," Lueck, of Robins Kaplan Miller and Ciresi, said.

    The appeals court yesterday said Eolas's infringement claim and the US$521 million award can stand if Microsoft fails to show at retrial that the patent is invalid. The award was based on worldwide sales of the Microsoft browser, not just computers sold in the United States.

    Microsoft spokeswoman Stacy Drake said the ruling is a "clear affirmation of our position" that the patent is invalid. "The reversal gives Microsoft the opportunity to tell the jury the whole story of how this technology was developed and present evidence that shows that Eolas did not invent this technology," she said.

    Microsoft says the contested patent does not cover a new invention and the inventor, Michael Doyle, the founder of Eolas, improperly withheld information from the US Patent and Trademark Office.

    At the new trial, Zagel must reconsider whether information about a different Web browser created by Pei-yuan Wei and others at O'Reilly and Associates could be deemed "prior art," or an earlier invention. If it is deemed prior art, then the judge or a jury would have to consider if it renders the Doyle patent invalid.

    The court also must consider whether Doyle committed "inequitable conduct" by failing to tell the patent office about the Wei browser, called Viola, even though he contacted Wei about it.

    "Every inventor is required to disclose to the patent office all information that is material to the patentability of the invention," said James Muraff, a lawyer with Wallenstein Wagner & Rockey in Chicago. "It appears to be clear that Doyle was aware of this information and it was not disclosed to the patent office."

    Rabena said Microsoft is entitled to ask that a jury, not the judge, review information on the Viola browser. The inequitable conduct issue "would really dirty the inventor in the minds of the jury," he said.

    (Source: China Daily/Susan Decker)