At the insistence of the World Wide Web Consortium (W3C), the US Patent and Trademark Office will re-examine the validity of a notoriously contested patent held by the University of California.

The patent, licensed exclusively to a small software company named Eolas, was used as the vehicle to successfully litigate a federal court case against Microsoft, in which the software giant was ordered to cough up a hefty $521 million in damages.

Microsoft began altering the way Internet Explorer interacts with ActiveX controls embedded in Web pages in order to sidestep the financial drain imposed by the court's judgment.

The changes could spawn major problems for the industry, potentially "breaking" millions of Web sites as well as software designed for IE by Redmond's friends and foes alike. Specialized instructions are being provided to vendors to deal with these changes.

The W3C is arguing that Eolas's plug-in technology, the product of research conducted at the University of California during 1994, is not much more than a paper that is predated by its own publications. Early HTML specification drafts authored by W3C head Tim Berners-Lee and staffer Dave Raggett could fall into the category of "prior art."

If this turns out to be the case, proof that the invention existed prior to the patent being awarded would nullify its standing.

In his order giving the green light to proceed with re-examination, Stephen Kunin, the USPTO's deputy commissioner for patent examination policy, said, "A substantial outcry from a widespread segment of the affected industry has essentially raised a question of patentability with respect to the 906 patent claims. This creates an extraordinary situation for which a director-ordered examination is an appropriate remedy."

Patent issues have become an increasingly hot issue across all segments of the technology industry. Among many examples, a legal battle surrounds claims of ownership being invoked by SCO over portions of UNIX source code.