Quite a few movers and shakers this week, with a major (USD $521 million) settlement being awarded to Eolas Technologies Inc and the University of California, the co-plaintiffs in a recent patent infringement case against Microsoft Corporation.

The plaintiffs alleged that Internet Explorer's "plugin" feature, which allows third-party applications to add functionality to the web browser, infringes upon US Patent No 5838906, granted in 1998 to Eolas. Unsurprisingly, Microsoft has appealed the decision. Microsoft's stock remained steady.

Linux licensee Red Hat Inc has spiced up the recent SCO controversy by filing a counter-suit. Red Hat is seeking a preliminary injunction against SCO to prevent them from sending threatening letters to Red Hat's customers, which claim that their Linux product is in violation of SCO's intellectual property. It will be interesting to see how this pans out.

In more interesting news, online auction vendor eBay has requested Google to bar its users from placing paid keyword advertisements which utilise eBay trademarks, including the eBay name. Spokesperson Kevin Pursglove described the move as a measure to prevent "third-party advertisers [from] abus[ing] the intellectual property of the company."

The request sparked concern that online businesses related to eBay (such as online auction management services, escrows, and proxy bidding providers) would be unable to utilise Google's popular AdWords programme to promote their services when users enter queries related to their area of trading.

This matter interests me for three reasons: firstly, it provides an opportunity for courts to assess the relevance of existing trademark law to the context of internet marketing. Currently, offline companies seem none too happy to allow their trademarks to be promoted by another company; examples are department store or supermarket advertisements, which depict particular products and discounted items. To deny reasonable application of this practice in cyberspace seems anti-competitive. It's not as though eBay would lose any revenue to people who offer eBay-related services; in fact, they stand to broaden their customer base.

Secondly, it represents an important juncture in search engine advertising. If it is established that trademarkets may not be used in keyword-based advertising, what implication does this have upon other forms of advertising, such as inline placement? Advertising that is placed inline is indistinguishable from normal pages, but preference is given to paid inclusions when users perform searches (eg Overture). Clearly there are limits to restrictions that may be placed upon online promotion.

Perhaps most ironically, however, this concerns a company who is itself to a large extent reliant upon other companies' trademarks. In addition, eBay itself employs a keyword-based advertising service, allowing auctioneers of wares on eBay to advertise with very few restrictions. Hilarious, I say!