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A $521 million patent infringement verdict against Microsoft Corp. may have been the result of what jurors didn’t hear, according to Microsoft’s lawyers. The five-week trial, which culminated in an August verdict, centered on technology that allows an Internet user to access interactive Web pages through the user’s Web browser. The method provides “plug-ins” that can display interactive information like stock charts, video players and virtual real estate tours. Microsoft began using the technology in 1996 with the release of Internet Explorer 3. The plaintiffs, represented by Martin Lueck of Minneapolis’ Robins, Kaplan, Miller & Ciresi, filed suit in 1999 claiming patent infringement. They alleged that the technology was first discovered by a team of researchers at the University of California’s San Francisco campus led by Michael Doyle. A patent was issued to the university in 1998 and later licensed to Eolas Technologies Inc., a Chicago-based software company founded by Doyle. A key argument of Microsoft’s defense was that prior art pre-dated Doyle’s research. According to the parties, Judge James Zagel held a hearing, without the jury present, to determine the weight of Microsoft’s evidence of prior art. The judge then issued a ruling about a week before deliberations, saying the jury would not be asked to consider that question. In trying to convince Zagel of the validity of its argument, Microsoft’s lawyers, David Pritikin and William Baumgartner of Chicago’s Sidley Austin Brown & Wood, along with in-house counsel, presented testimony that a program called Viola, invented by Pei Wei, had been publicly demonstrated before Doyle’s patent application was ever filed. Pritikin and Baumgartner documented a series of e-mail messages between Doyle and Wei that disputed which research came first. Microsoft also claimed that it had paid more than $10 million between 1994 and 1997 to license the Mosaic Browser, a helper application that it considered a prototype of Doyle’s patented application. “We believe very strongly that we were right on the law and on the facts,” says Andrew Colbert, Microsoft’s associate general counsel. “The patent examiner never had a chance to weigh the application against this prior art. Once that prior art is considered, our position will be vindicated.” Zagel declined to let the question go to the jury. Microsoft lawyers will likely appeal the issue to the Federal Circuit U.S. Court of Appeals. They will also appeal a ruling that allowed the plaintiffs to seek damages on units of Windows with Internet Explorer produced and sold outside the United States. The jury’s verdict of $512 million represents $1.47 for each unit of Windows sold between November 1998 and September 2001 — approximately 354 million copies, including foreign sales. Microsoft had suggested a damages figure of $3 million to the jury, while the plaintiffs recommended $1.2 billion. The question of foreign damages will be an important issue of first impression for the panel that hears the case at the Federal Circuit, says Harold Wegner, an expert on intellectual property in the Washington, D.C., office of Foley & Lardner. Microsoft claims that foreign sales represented 68 percent of the jury’s verdict. Lueck, the plaintiff’s counsel, asserted that Doyle’s technology is used in “just about every application you can think of.” But the plaintiffs sued Microsoft because the patent specifically covers a browser program, and Microsoft controls the majority of the market share. Attorney Charles Kulas wrote the patent in 1994 while he was an associate at San Francisco’s Townsend and Townsend and Crew. When he left the firm the following year, fellow Townsend lawyer Charles Krueger took charge of the patent and worked on the claims that were ultimately cleared by the U.S. Patent and Trademark Office in 1998. Krueger and Kulas each have their own firms now. Kulas, who had returned to Townsend after a two-year stint at Sony Corp. of America, left again in April to start Carpenter & Kulas with another former Townsend attorney. Krueger, who started at Townsend in 1983, left the firm two years ago to become a solo practitioner in Walnut Creek, California. The UC victory over Microsoft has certainly given them something to brag about. “I can say I’ll write a $1 million patent for $10,000,” jokes Kulas. “But I haven’t gotten any extra business.” Dee McAreeis a member of the editorial staff atThe National Law Journal , which is affiliated withThe Recorder . Her e-mail address is [email protected]. Brenda Sandburgcovers patent law developments and other intellectual property issues atThe Recorder.

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