A jury in 2003 ordered Microsoft to pay $521 million for infringing U.S. patents held by Eolas Technologies Inc. and the University of California on code that enables a variety of software applications to work seamlessly with Web browsers.
An appeals court reversed parts of that decision earlier this year, sending it back to district court.
Microsoft, however, appealed to the Supreme Court for a ruling on whether the appeals court was correct in basing the award on worldwide sales rather than domestic sales. The company argued that basing the award on worldwide sales is an expansion of the scope of U.S. patents.
Microsoft spokesman Jack Evans said the company would continue to fight the case in the lower court.
Eolas' founder, cellular biologist Michael Doyle, says he invented the technology while working at the University of California more than a decade ago and then watched Microsoft capitalize on it by including the features in its Internet Explorer browser.
Microsoft contends the Eolas patent is invalid because the technology had already been developed and showcased in a May 1993 demonstration by another inventor, Pei-Yuan Wei.
The case is Microsoft Corp. v. Eolas Technologies, 05-288.