In A Pyrrhic Patent Victory, Jim Rapoza notes, as have many others, that it is surprising that Microsoft, with all of its resources, was unable to come up with a single bit of prior art to contest the Eolas patent. He has a darker interpretation of this failure:
[T]he real victim of this lawsuit isn’t Microsoft. It’s Macromedia, whose ubiqui- tous Flash technology is at its best when embedded in Web pages. It’s alternative browsers, such as Konqueror, Mozilla, Opera and Safari, which use application plug-ins. It’s developers who create embedded Java applications for Web pages, who will have to develop applications differently. It’s multimedia applications such as RealOne and QuickTime. And it is regular Web users, who may soon find that many of their favorite Web pages will no longer work the way they used to.
[...] This [failure to find prior art] has led to a lot of discussion about why Microsoft, one of the most powerful and richest companies in the world, couldn’t defeat this patent in court. This is tough to figure out. It could be that Microsoft’s stable of high-priced lawyers messed up. Or maybe the judge and jury had no understanding of technology and patents.
A darker theory is that Microsoft didn’t want to employ tactics that would undermine its own shaky patent portfolio. An even more paranoid–yet still plausible–reading of events is that Microsoft wanted to lose. After all, Microsoft spent $150 million to kill Netscape on the Mac. Spending $520 million to damage its Web and multimedia competitors would be a relative bargain.
Microsoft has announced it’s implementing changes to avoid violation of this patent, which will almost certainly reduce the functionality of Internet Explorer. This will be another in a long series of steps that Microsoft has taken that reduce the capabilities of its Web browser.
Microsoft’s eventual goal is to roll many Web capabilities into its applications and operating systems. If the browser ceases to be a place where interactive applications are possible, people may turn to interactive Internet applications that are embedded in Microsoft applications.