updated 8/31/2007 9:23:52 AM ET 2007-08-31T13:23:52

Microsoft Corp. said Thursday it settled a patent dispute with Eolas Technologies Inc. over Web browser patents.

Microsoft did not disclose the terms of the settlement. A retrial of a 2003 lawsuit, brought by Chicago-based Eolas Technologies, was set to begin at the end of the month.

(MSNBC.com is a Microsoft-NBC Universal joint venture.)

A federal court in Chicago ordered Microsoft to pay $521 million for copying technology developed by Michael Doyle, Eolas Technologies' chairman, while he was at the University of California at San Francisco. The university owns the patent, which helps embed small interactive programs — plug-ins or applets — into Web pages; Eolas has exclusive marketing rights.

Parts of that decision were reversed in 2005 by U.S Court of Appeals, which ordered the new trial.

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