The United States Supreme Court on Monday refused to hear an appeal by Microsoft regarding its patent lawsuit brought by Eolas and the University of California over the way Internet Explorer utilizes browser plug-ins.

The decision is the second legal setback for Microsoft in as many months. In late September, the U.S. Patent and Trademark Office upheld Eolas' patent, which Microsoft claimed should be invalidated by prior art. Microsoft said it would turn to the courts to have the patent nullified.

Microsoft says the damages were calculated using worldwide sales of Windows, rather than just those copies sold in the United States where Eolas' patent is enforced. 64 percent of the award covered overseas sales, Microsoft said in its filing.

The Redmond company is attempting to appeal the patent verdict on another front as well.

In June 2004, Microsoft filed a 174-page brief asking the U.S. Court of Appeals to overturn the ruling. In March, the appeal was granted, sending the case back to a lower court, where Microsoft plans to prove that Eolas did not invent the technology, and knowingly withheld information from the USPTO.

Some of the software affected by the patent would include Macromedia Flash, QuickTime, RealOne Player, Acrobat Reader, Sun's Java Virtual Machine, and Windows Media Player among other applications that embed into Web pages.