Microsoft Statement in Response to U.S. Court of Appeals Decision in Eolas Patent Case

REDMOND, Wash., March 2, 2005 — Todays Appeals Court decision overturning and remanding the District Court verdict in the Eolas patent case is a clear victory not only for Microsoft, but for Internet users as well.

We have maintained throughout this process that the Eolas patent is not valid, and todays ruling is a clear affirmation of our position. The potential enforcement of the Eolas patent further created confusion that could have impacted the use of the World Wide Web. This concern was shared by others in the industry — including the W3C — who have also maintained that the patent is invalid and have requested a re-examination by the U.S. Patent Office.

Todays reversal gives Microsoft the opportunity to tell the jury the whole story of how this technology was developed and to present evidence that shows that Eolas did not invent this technology, and that it was developed by others, particularly Pei-yuan Wei and his colleagues at OReilly and Associates. They are the true pioneers of this technology. The ruling also gives Microsoft the opportunity to present evidence that Eolas knowingly withheld information about Pei-Weis invention to the Patent Office.

Microsoft is an intellectual property company and we are proud of the quality of our innovation. We respect the IP rights of others and stand behind our products. Like many large companies, we are often the target of baseless patent claims. Todays victory reinforces the strength of our position in patent litigation. In addition to todays reversal, Microsoft has won two verdicts in patent cases in the past six months and has been successful in defending against over 12 other patent infringement claims.

We look forward to the next steps in this process and the opportunity to present our whole case on this matter.

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