I'm sure this is old news for some, but the $520.6 million award to Eolas for Microsoft's infringement of their patent is being sent back for reconsideration by the trial court.http://biz.yahoo.com/law/050303/24b3e0964930bfac388c6646ceb5cbc7_1.html
These appear to be the main points:
1. Another person demonstrated a browser to two Sun Microsystems employees more than a year prior to Eolas's filing. The main issue here is whether that use qualifies as prior art. To what degree it anticipates the Eolas claims is still undecided. The Federal Circuit suggests the district court confused prior use under Section 102(b) and prior invention under 102(g) in declaring the use not prior art. Point for Microsoft. In addition, if the use is prior art, the district court should reconsider Microsoft's allegation of inequitable (unfair) conduct by Eolas for not reporting it to the Patent Office. Another point for Microsoft.
2. The Federal Circuit affirmed to the district court's interpretation of "executable application" as not requiring a stand-alone program but can refer to plugins and such. Point for Eolas.
3. The gold "master disks" sent overseas by Microsoft to have their software pre-installed overseas for reimportation here represents infringing activity -- for each installation overseas. The idea is that you can't make all the parts here and the send final assembly off-shore to avoid infringement. The Federal Circuit upholds the district court's ruling. Huge point for Eolas (in terms of the damages due Eolas by Microsoft).
However, all this is overshadowed by the fact that the patent in question is currently undergoing re-examination in the US PTO. If the patent doesn't survive, Microsoft wins.
If I read this right, it looks like the stakes will stay about about a half billion dollars with winner take all. The main issues appear to be (i) whether showing something to two people without an NDA is a "public use" within Section 102(b) and, if so, (ii) whether any of the Eolas claims are anticipated by, in obvious in view of, the publicly used browser and (iii) whether Eolas's failure to inform the Patent Office of that use was inequitable conduct rendering the patent valid but unenforceable.
If Eolas wins on (i), it's all over for Microsoft unless the Supreme Court decides to hear an appeal. If Microsoft wins on (i), I believe Eolas will have to win both (ii) and (iii) to stay on top.