Companies with products that work on the Internet are slowly waking up to the broad implications of a recent judgement against software behemoth Microsoft in a patent infringement case.

The $520 million award to Eolas Technologies of Chicago and the University of California (UC) stemmed from a 1999 lawsuit in which Eolas and UC charged Microsoft with infringing on a 1998 patent owned by the university and licensed to Eolas. However, the verdict could spell trouble for a wide range of popular Web-based products and services, experts agree.

That patent, U.S. number 5,838,906, was developed by Eolas president Michael Doyle at the University of California in San Francisco and covers technology that enables small computer programs, often referred to as "applets" or "plug-ins," to be embedded in Web pages and interacted with through Web browsers like Microsoft's Internet Explorer.

In response to the judgement against it, Microsoft said last week that it will be making changes to Internet Explorer (IE) that may affect a "large number of existing Web pages," according to a statement by the World Wide Web Consortium (W3C).

In addition to pursuing post-trial motions against Eolas, Microsoft is also evaluating what changes may be necessary and will not comment on its work, according to company spokesman Jim Desler. The software giant stands by its claims that it did not infringe on the Eolas patent, but will work to minimize the effect on customers of changes to IE and is cooperating with the W3C to coordinate that effort, he said.

Computer security experts initially hailed the announcement, speculating that the ruling might spell the end of Microsoft's ActiveX controls, notoriously insecure software components that allow software developers to integrate specialized functionality with Web pages.

But technology and legal experts agree that the ruling could affect a wide range of technology companies with products that interact with Web browsers, or services that rely on customer interaction through Web browsers.

"Fundamentally, (the Eolas patent) describes a way of implementing plug-ins in a Web browser," said Richard Smith, an independent technology expert in Boston. "People who use plug-ins like (Macromedia Inc.'s) Flash or Java applets are covered by the Eolas patent," he said.

The IDG News Service is a Network World affiliate.