Eolas vs. Microsoft Lawsuit Settled and Sealed

theodp writes "The Seattle P-I's Todd Bishop reports that Microsoft has settled its 8-year-old web browser plug-in patent dispute with Eolas. The spat begat the click-to-activate Web after Microsoft was slapped with a $500+ million patent infringement judgement. Neither Eolas nor Microsoft will be disclosing terms of the deal, although Eolas told investors to expect a dividend (PDF). Microsoft didn't say whether or how the settlement would affect its approach to the underlying technology in IE or other programs. Just last month, the USPTO issued a non-final rejection of the patent's claims, citing the work of Pei-Yuan Wei as prior art."

Excellent

[_Shorty-dammit]

Sounds as though the end is nigh for the useless extra clicks. Eolas deserves a smack. Too bad they're getting rewarded.

Re:

[Anonymous Coward]

How does Eolas deserve a smack for this? The entire idea of software patents encourages this sort of behavior. If anyone deserves a smack it is whoever has the power to eliminate software and business practice patents and fails to do so.

Re:

[_Shorty-dammit]

Bah, I can choose whether or not to do bad things. The people running Eolas are no different. Love how you posted anonymously, too, btw. If you're going to say anything, stand behind it. Hidin' is for wussies.

Re:

[redcane]

Eolas deserves a smack for extorting money from Microsoft, even though their patent has been rejected (according to summary). Whilst I did chuckle that MS had to pay money for something so simple, I though it impossible there was no prior art, or that running a flash object without clicking is not obvious!

Flash where it shouldn't be

[Spy der Mann]

I have one thing to complain. While you have to click to play a video you already clicked, the annoying web adds do play instantly! :-S

The world isn't fair...

Re:

[El Lobo]

That's the good side of being poor. Only the fattest duck get slayered when a hungry patent pirat attacks.

Re:

[Zarel]

Oh, that's right, I use a good web browser (Firefox|Safari|Opera).

Note that Opera still requires a click to activate a Flash control.

what?????

[superwiz]

Two public companies reach an agreement and the terms are not released to shareholders? What is this? Science fiction?

Re:what?????

[EveryNickIsTaken]

Wait for the next quarter's report when they'll have to disclose it. SEC rules are fun.

Re:

[Jayfar]

"Eolas is privately held, and the letter does not disclose the total number of shares outstanding in the company."

So no disclosure from Eolas. It remains to be seen how effectively ms can hide the terms and dollar amount in their quarterly reports.

Re:

[jim_redwagon]

don't know the exact law/act/SEC rule, but my thoughts are MS will be able to bury it under a cost of doing business line item. especially one that's been used to pay fines/compliance for any anti-trust happiness they've been involved with.

Re:

[yaddayaddaslashdot]

Public companies generally are required to disclose settlement terms if they are material.

Last quarter Microsoft's gross revenues were somewhere north of $14 billion. If they paid 500 million to Eolas (and presumably it was less than that, given the verdict of $521 million and the fact of a pending reexam that might kill the patent), that's way less than 5% of their revenues for one quarter. Most securities experts would say that isn't material.

And the other terms of the agreement probably amount to sayin

Re:

[monk.e.boy]

Yeah, we've just spent ages figuring out all the quirks of swfobject...

Oh well. I guess we'll still need to use it for all the losers on IE6? Or will they back port the patch?

... but. Really. Who cares? Get Firefox or Opera and get on with your life.

monk.e.boy

Re:

[Anonymous Coward]

Now that Microsoft has settled, who is next on the list? It may well be Opera or the Mozilla foundation. Beware, more lawsuits are probably coming.

Re:

[Ajehals]

That was my initial thought.
The question really hinges on whether the patent remains valid given that Microsoft chose to settle, I hope someone better versed in US patent law could give us some sort of answer.

(although uninformed speculation may be more fun... :) )

Re:

[senatorpjt]

It probably also hinges on the terms of the settlement, which are of course, unknown.

Re:Click twice pain...

[Ajehals]

Can I ask why you would come to that conclusion? It was the only one I ignored using the following reasoning:

The process to invalidate the patent was clearly initiated, surely it is in the public interest to remove invalid patents, regardless of the outcome of any particular case. Its not like the settlement would establish any sort of precedent, never mind the fact that Microsoft or Eolas's statements on the matter shouldn't have any bearing on whether the patent is valid or not, especially since there is an established method for testing the validity of patents.

I may be being naive of course.

Re:

[Constantine XVI]

Won't be Opera. They've already put the "workaround" to the patent in Opera.

Change in law

[sqldr]

The "dividends" part of this topic gives away the problem. A more mercenary person would now be slapping themselves for not investing in Eolas - and thus contributing to the problem and making money out of it.

There's one thing (another story) with suing over a frivolous patent if you make the product, but this company only exists to take money off another and give it to people who've done no work whatsoever.

Simple. Freeze the shares of a company who files an IP suit over a patent they're not using. If a

Re:Change in law

[giafly]

Simple. Freeze the shares of a company who files an IP suit over a patent they're not using.

Dumb.

1. Company announces it will sue and shares rise
2. Company sues and shares are frozen at this higher price
3. Directors get $$$$s by e.g. borrowing against the shares
4. Profit!

Re:

[bob_herrick]

It will be interesting to see how they use those frozen shares as collateral. Since they cannot be sold, who would lend on their 'value?'

but how...

[TheAxeMaster]

How do you put that into law? IANAL or wouldn't even attempt to write a law, but I've been behind the idea of revoking a patent that a company isn't actively using/developing a product with after a set period of time (3 years?). This would prevent IP holdings companies from existing very effectively. But I'm also a proponent of reforming the patent law back to 7 years and we see how far that is getting...and the copyright law, etc.

Hurry!!

[SpeedyDX]

What's the ticker symbol for Eolas? I uh ... just want to check their um ... corporate history. Nothing to do with the upcoming dividend. No sirree.

Eolas privately held

[Jayfar]

No ticker - Eolas shares are privately held.

Re:

[bodino]

Just in case you didn't RTFA (*I'm shocked!*), it claims:

Eolas is privately held, and the letter does not disclose the total number of shares outstanding in the company.

Re:

[SpeedyDX]

I was trying to be funny, but thanks. :)

For the layman

[Alzheimers]

So let me get this straight...Eolas pattented Clicking?

And Microsoft couldn't find any prior art for a toggle switch?

Re:For the layman

[silentben]

In a nutshell, Eolas had a patent pending for some form of integrated media into web pages. When IE supported Flash, Eolas saw this as infringement and sued Microsoft. Since then, MS designed new versions of IE to require you to click on a Flash element in order to activate it, thereby no longer being fluid. But they left a back door in that if a developer included the Flash object by having a separate javascript file write it to the page, then this would not require clicking to activate it (enter SWFObject as the lay-developers easy way out). I just hope that this settlement included some exchange of words that discouraged Eolas from pursuing similar charges against Mozilla and other browser developers. It is bad enough they had effected change with THIS frivolous lawsuit.

Re:

[hoooocheymomma]

I seem to remember that Eolas has stated that open source projects will not be targeted in the way microsoft was (hence mozilla not being pursued ).

It's worse...

[Urusai]

...they patented NOT clicking.

Misread the headline

[ThanatosMinor]

Although I would like to see who would win in a fight between Microsoft and Ebola.

Re:

[deft]

I don;t think anyone around here would be able to distinguish between the two fighters.

Backward Steps

[mateuscb]

The US needs to do something about patents laws! If I'm not mistaken Vonage is still in trial with Verizon, now this Microsoft thing, and I'm sure others out there. It's gotten to a point where patents are holding technology back. Technology should never be held back by bureaucracy. But unfortunately that is where we are headed. Simply put, our patent system is quite sad, and yet another example of how the mighty USA is falling behind and in essence shooting itself in the foot.

Re:

[account_deleted]

Comment removed based on user account deletion

Why sealed?

[PingXao]

How is it in the public interest for this agreement to be sealed? Any suit that goes on, using public resources along the way, should not be eligible for this "feature" of settlement, i.e. "sealing" the settlement agreement. The public has the right to know the details.