Appeal by Microsoft Rejected

Microsoft Corp. lost a U.S. Supreme Court bid to slash $360 million from the potential award in a lawsuit that says the company’s Internet Explorer browser relies on technology patented by the University of California.

The justices, without comment in Washington, turned away a Microsoft appeal that sought to limit any damages by excluding foreign-distributed copies of Internet Explorer from the award calculation.

Microsoft was ordered in January 2004 to pay $565 million to the university and partner Eolas Technologies Inc. after losing a jury trial. A federal appeals court overturned the award in March, ordering a new trial on the patent’s validity in federal court in Chicago. The damages may be reimposed if a jury finds the patent valid.

“We will continue the trial of the remanded case in the district court and we are confident that we will ultimately prevail,” Microsoft spokesman Jack Evans said.

The U.S. Patent and Trademark Office upheld the Eolas patent in September after taking a second look in a proceeding that parallels the court case. Some issues considered by the patent office will be before the court, said Martin Lueck, a lawyer for closely held Eolas.

“We don’t believe the outcome will be any different in front of the court than it was in the patent office,” Lueck said.

No date has been set for a trial, Lueck said. The dispute is one of more than two dozen patent infringement cases that Microsoft, the world’s largest software company, is defending.

At the Supreme Court, Microsoft argued that the U.S. Court of Appeals for the Federal Circuit was wrong to permit damages for Internet Explorer copies derived from the “golden master” disks the company ships to foreign-based computer makers. The disks contain the code for Microsoft’s Windows operating system, which includes Internet Explorer.