Microsoft ordered to pay $521M
By Mary Wisniewski
Bloomberg News Service
Microsoft Corp. must pay $521 million to the University of California and a Chicago-area company, which claimed their patents were infringed by the software giant's Internet Explorer Web browser, a jury decided.
A federal jury in Chicago yesterday concluded that Microsoft infringed a patented method for accessing interactive programs with an Internet browser. The University of California and Eolas Technologies Inc. had sought as much as $1.2 billion, claiming the invention enabled Microsoft to compete with the Netscape Navigator browser, now owned by AOL Time Warner Inc.
"While today's outcome is disappointing, this is just one step in a long process," Microsoft spokes- man Jim Desler said. "We plan to appeal this decision, and we are confident the facts will support our position."
Microsoft, the world's largest software maker, has $49 billion in cash and short-term investments, and no debt. The European Union is considering a fine against the Redmond, Wash.-based company because of antitrust allegations.
"Every little bit hurts, with the EU last week and now this. But they can pay this 100 times over with their cash and there's the appeals process," said Alan Davis, an analyst at McAdams Wright Ragen, which manages $2 billion and owns Microsoft shares. "It's a minor negative. It adds up to about 4 1/2 to 5 cents a share, but it does add up after a while."
The verdict came after the end of regular Nasdaq Stock Market trading, where Microsoft shares rose 3 cents to $25.61.
During the monthlong trial, Microsoft argued that its Web browser is fundamentally different than the university's invention. The technology allows computer users to interact with applications on the Internet, such as a game of solitaire.
Internet Explorer's system to locate and identify applications on the Web depended on the Microsoft Windows operating system, and is not browser-based, the software giant claimed.
Eolas' request for $1.2 billion in damages was based on a $3.50 royalty per unit sold between Nov. 1, 1998, and Sept. 30, 2001. The jury determined a rate of $1.47 per unit.
