Just when it seemed certain Microsoft Corp. had lost its now 8-year-old patent dispute with Eolas Technologies Inc., the U.S. Patent and Trademark Office (USPTO) has reopened the case, giving Microsoft a chance to prove that Eolas' patent for browser plug-ins should not be valid.

Microsoft confirmed Friday that the USPTO will 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. There now will be a separate proceeding in the USPTO on the question of who owns the patent claims, said Jack Evans, a Microsoft spokesman.

Andy Culbert, Microsoft associate general counsel, said the company is pleased to have another opportunity to establish that it is the original inventor of the disputed technology.

The news is the latest twist in a case that began in 1999, when Eolas first filed suit against Microsoft for infringing on its patent for embedding interactive content in a Web site. Eolas said Microsoft violated its patent in its implementation of ActiveX in Internet Explorer.

Eolas, a spin-off of the University of California, was awarded a $520.6 million judgment 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 USPTO upheld Eolas' patent.

Disputes over U.S. patents appear to be coming to a crucial crossroads, with patent litigation running rampant and increasing polarization between those who seek strong software patents and those who think that software should not be patentable. Microsoft recently heated up the debate when company executives said in a magazine article that it would aggressively seek royalties for patents the company says it holds for technologies in open-source software. Some think U.S. lawmakers should enact patent reform laws to minimize litigation or prevent patent cases from dragging on for years.

The Supreme Court recently made it a little more difficult for companies to prove that their patents are valid in an instance where there could be many competitors trying to solve the same problem. In an April 30 ruling in the case KSR v. Teleflex, the Court weakened the position of a patent-holder if it created a technology that another company may have invented previously or around the same time, but did not yet file for a patent.

The IDG News Service is a Network World affiliate.