The US Patent and Trademark Office has approved the controversial Eolas patent, to the dismay of Microsoft and others.

Microsoft is accused of infringing the patent. In a decision unveiled Wednesday, the office reconfirmed the Eolas Technologies patent that allows interactive content to be embedded within a website, which is a common practice on the Internet. Eolas is a spin-off of the University of California.

Patent declared valid

According to a news release from the university, the patent office completed a "re-examination process" on the original patent, which was published in November 1998, and plans to issue a re-examination certificate to uphold its validity.

"We are gratified that the patent office's re-examination has validated its original evaluation of the University's unique contribution to the technology, which fuels the Internet," said James Holst, general counsel for the University of California.

"This decision ensures that the patent rights of the public institution that developed this technology, a significant innovation with wide-reaching public benefits and use, will be protected."

In a statement, Microsoft said it is studying the patent office's decision but still plans to present its side of the argument at the retrial as scheduled. "We are confident we will achieve a successful resolution," the company said.

$520.6 million at stake

Eolas first filed suit against Microsoft in 1999 for infringing its patent in Internet Explorer, and it was awarded a $520.6 million judgment in August 2003. However, an appeals court judge threw out that ruling in March 2005 and ordered a new trial to determine the patent's validity.

After that judgment, Microsoft filed an appeal asking the court to overturn a portion of Eolas' case that was not reversed when the court ordered a new trial. That part dealt with patent claims on foreign sales of Microsoft's Internet Explorer browser. Microsoft has asked the court to reject Eolas' argument that it should be awarded money based on both Microsoft's US and foreign sales, saying the Eolas US patent only covers US sales.