Eolas files patent lawsuit against 22 companies

Targets include Adobe, Google, Yahoo, Apple and eBay

Technology research company Eolas Technologies, which won a $520.6 million patent infringement case against Microsoft in 2003, has filed a new patent lawsuit against 22 companies including Adobe Systems, Google, Yahoo, Apple, eBay and Amazon.com.

Eolas' lawsuit, filed Tuesday in U.S. District Court for the Eastern District of Texas, claims the tech vendors and other companies have violated two Eolas patents, one for allowing embedded applications in Web browsers, and the second a continuation of the first patent, allowing Web sites to add embedded applications through the use of plug-ins and AJAX (asynchronous JavaScript and XML).

"We developed these technologies over 15 years ago and demonstrated them widely, years before the marketplace had heard of interactive applications embedded in Web pages tapping into powerful remote resources," Michael Doyle, chairman of Eolas, said in a statement. "Profiting from someone else's innovation without payment is fundamentally unfair. All we want is what's fair."

Eolas is asking the court to prohibit the defendants from using the patented technology and to pay triple the actual damages for willful infringement of the patents. "Right now, each of these companies is using our invention, but we're receiving no compensation," said Mark Swords, CEO of Eolas. Representatives of Google, Amazon.com and eBay didn't immediately respond to requests for comments on the lawsuit.

Eolas was awarded a $520.6 million judgment in the lawsuit against Microsoft in August 2003. An appeals court threw out that ruling in March 2005 and ordered a new trial to determine the original patent's validity. The U.S. Patent and Trademark Office later upheld the first Eolas patent, number 5,838,906 ('906), and Microsoft settled the Eolas lawsuit in August 2007 for an undisclosed amount.

The Microsoft patent award was used as an example of problems with the U.S. patent systems, with critics pointing to the award as a reason to pass patent reform legislation in the U.S. Congress. Several large tech vendors have pushed Congress for legislation that would make it harder for patent holders to collect huge patent awards, saying awards in recent years have gotten excessive. Patent reform legislation has been stalled in Congress for several years.

In late 2003, Tim Berners-Lee, director of the World Wide Web Consortium (W3C), urged the U.S. Patent and Trademark Office to reject the '906 patent. The USPTO should invalidate the patent "in order to prevent substantial economic and technical damage" to the World Wide Web, he said then.

But Swords noted that the USPTO has now looked at the '906 patent three times and upheld its validity. "One of the criticisms of the patent system has been that weak patents get out," he said. "That couldn't be further from the truth" in this case.

Eolas, which focuses on building bioinformatics products, would be open to settlements from defendants that are willing to talk, Swords said. The original '906 patent was filed for technology that allows researchers to work together on large data sets, he said.

He rejected arguments that enforcing the patent would hurt the Web. "We heard this in our lawsuit with Microsoft, that this is going to break the Web," he said. "It didn't."

Mike McKool, of law firm McKool Smith and lawyer for Eolas, said he hopes the lawsuit will put an end to the widespread unauthorized use of the company's technology patents. "What distinguishes this case from most patent suits is that so many established companies named as defendants are infringing a patent that has been ruled valid by the Patent Office on three occasions," he said in a statement.

The '906 patent was granted in November 1998. The second patent, number 7,599,985, was granted Tuesday.

Other defendants in the patent lawsuit include Citigroup, the Go Daddy Group, Staples, Office Depot, Sun Microsystems and Texas Instruments.

Copyright © 2009 IDG Communications, Inc.

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