The University of California Tuesday defended its controversial Eolas patent that many fear could critically damage the Web.

The University is appealing against a decision by the US Patent and Trademark Office (USPTO) which rejected the patent's validity.

In 1998 USPTO granted the university patent number 5,838,906, which covers technology for embedding interactive elements in Web pages. The following year, the university and Eolas Technologies (the sole licensee of the technology) sued Microsoft for infringing on the patent in Windows and Internet Explorer. The plaintiffs won the case in August 2003 and Microsoft was ordered to pay $521 million in damages.

The verdict triggered an outcry from industry and Internet experts. World Wide Web creator Tim Berners Lee wrote a letter to the US Under Secretary of Commerce for Intellectual Property, requesting that the USPTO re-examine the patent's validity, arguing that the technology in question already existed when the patent was applied for, a common antipatent argument known as "prior art." He also said the patent's existence could damage the Web's operation.

In response, the USPTO began the rare process of reviewing the patent's validity, which could result in the stripping of the technology from patent protection. It chose to reject the patent in an initial finding released in February.

The University of California said: "Our general argument is that the prior art that was cited in the request for re-examination isn't relevant to the merits of our patent."

Trey Davis, director of special projects and new media for the university described February's decision as "expected", because it was based on the arguments of those objecting to the patent. He added: "Now that we've had a chance to file our response, we're confident the university's patent claim will prevail," he said.

The USPTO may decide to modify the patent by narrowing its scope, said Brigid Quinn, a USPTO spokeswoman, on Wednesday. A review process such as this one takes on average 21 months to complete, she said.

"The ultimate consequence of what we're talking about is whether Microsoft gets to continue to use technology it didn't develop to make exorbitant profits or whether they should they pay a fair market price for the use of technology that was developed by other people," Davis said.

"We have maintained all along that when scrutinized closely, this patent will be ruled invalid," said Microsoft spokesman Jim Desler.