WASHINGTON: A federal jury found that Microsoft Corp's popular Internet Explorer browser infringed on a patent and ordered the company to pay US$520 million in damages to a smaller software firm and the University of California.

Microsoft attorney Andy Culbert said the jury's finding issued on Monday will be appealed.

The jury could have awarded as much as US$1.2 billion to the university and Eolas Technologies Inc of Chicago.

"We are very satisfied," said Eolas attorney Martin Lueck. "It shows the jury system works. Patents need to be respected regardless of the size and the market power of the company involved."

Eolas, which is the Gaelic word for knowledge, is an acronym for "embedded objects linked across systems." The company was launched in 1994 to market technology that allows users to access interactive programs embedded in web pages.

Eolas Chairman Michael Doyle along with two others developed the technology while at the University of California in San Francisco. Eolas owns the exclusive rights to market the technology, while the university owns the patent.

Eolas and the university say Microsoft made their technology part of Internet Explorer and bundled it with Windows.

Microsoft attorneys argued that the patent was invalid and said that in any case their client had never infringed on it. Microsoft said the patent described features the technology did not deliver.

Eolas says the patent Microsoft was found to have infringed upon is the first browser system that allowed for the embedding of small interactive programs such as "plug-ins" or "applets" into World Wide Web documents.

Such programs are central today to online commerce as they power everything from banner advertisements to interactive customer services.

The award was based on the jury's calculation that US$1.47 per unit represented reasonable royalties for the 354 million copies of Windows sold from the time the patent was granted in November 1998 until September 2001.

Eolas and the university had been asking for US$3.50 for each unit. The average price of Windows during the period was US$61, attorneys said.

Attorneys said Eolas will receive the bulk of any damages that are eventually paid, but declined to provide the specifics.

Microsoft faces more than 30 patent-infringement lawsuits, covering digital rights management, online video game software and other technologies.

Agencies via Xinhua

(China Daily 08/13/2003 page6)