Microsoft settles Eolas patent feud

Eolas disclosed the settlement in a letter to its share holder, a copy of which has been posted on the website for the Seattle Post-Intelligencer. The letter states that the two firms reached an agreement on 24 August.

Microsoft has confirmed the settlement in a statement to vnunet.com.

Details of the settlement weren't disclosed, but Eolas said that it will provide additional information at a shareholder meeting on 4 September. The firm also promised that the settlement will result in the payment of a dividend of US$60 to US$72 per share.

The University of California owns the patent and has an exclusive licensing agreement with Eolas. It is set to receive a part of the settlement sum.

Eolas filed a legal complaint against Microsoft in 1999, alleging that the software giant infringed on one of its patents. The disputed technology covers a way to embed interactive components into a web page, such as the way that Youtube videos can be embedded onto a blog.

Microsoft has since changed the way that its Internet Explorer browser embeds Active-X elements. Users are now required to activate interactive items by clicking on them where previously such items would function automatically.

The company previously argued that the patent should be invalidated due to prior art, a legal term indicating that somebody else invented the technology before the Eolas researchers did. Last June the US Patent and Trademark Office (USPTO) agreed to an investigation into the patent which could potentially lead to its invalidation.

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