Microsoft, Eolas seek to settle patent rift out of court

Microsoft and Eolas are in discussions to settle their patent dispute out of court once and for all.

Microsoft is seeking to settle its long-running patent suit with Eolas Technologies through negotiations rather than heading back to the courtroom.

The company confirmed Tuesday that it is in "active discussions" with Eolas to settle a patent suit over Internet Explorer that was first filed in 1999.

"We are hopeful that we can resolve our dispute amicably," Microsoft said through its public relations firm Tuesday.

A retrial for the case was scheduled to start Monday in a Federal District Court in Chicago. However, it has been put on hold for 30 days at the request of the companies as they try to hammer out a settlement, according to Microsoft.

Eolas, a spin-off of the University of California, claims Microsoft infringed on its patent for embedding interactive content in a Web site. At the time, the company said Microsoft violated its patent in its implementation of ActiveX in Internet Explorer.

Eolas was awarded a US$520.6 million judgment in the suit in August 2003. However, an appeals court threw out that ruling in March 2005 and ordered a new trial to determine the patent's validity. In September 2005, the U.S. Patent and Trademark Office (USPTO) upheld Eolas' patent, and it seemed the case was settled.

In another twist, the USPTO reopened the case in June, giving Microsoft a chance to prove that Eolas' patent for browser plug-ins should not be valid. At the time, the USPTO said it would consider the company's argument that it was the first to invent the technology the Eolas patent covers, declaring "interference" in the case and scheduling a rehearing.

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