The U.S. Patent and Trademark Office has made a preliminary decision to invalidate a claim to Web browser technology central to a case against Microsoft ( MSFT), a move that could spare the software giant from paying more than a half-billion dollars in damages, Reuters reported Friday.

In August, an Illinois civil jury found that the Redmond, Wash., software company infringed on the interactive Web-browsing technology of Chicago-based Eolas Technologies and the University of California, and awarded the plaintiffs $521 million. The suit, which dates to February 1999, charged that Microsoft violated Eolas' patent on Web-browser technology that makes "plug-ins" and "applets" possible.

The award was based on the jury's calculation that $1.47 per unit of royalties for 354 million copies of Windows sold from the time the patent was granted in 1998 until September 2001, according to news reports.

"We have maintained all along that, when scrutinized closely, this patent would be ruled invalid," Microsoft spokesman Jim Desler said in a statement.

Desler said that Eolas has 60 days to respond to the decision and that the agency's ruling was "just one step in their review process, but clearly a positive step."

A spokesman for privately held Eolas told Reuters he was confident that the Patent Office would reverse the preliminary finding.

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