Microsoft recently lost a case (to the tune of $520 million) involving a patent infringement lawsuit brought by Eolas Technologies. Basically, Eolas has a patent on the concept of accessing external applications from within documents, which would cover all of the applets and browser plugins you might bump into during your web browsing. That means any page that includes embedded media such as songs or video, java applets that run on pages, and even sites that use Flash.
Hopefully this decision will be overturned on appeal, but Microsoft has worked with other members of the W3C’s new Patent Advisory group to find a workaround. MSDN has new information on the proposed user experience which will be included in the forthcoming SP1b version of Internet Explorer. Mozilla and Opera should be releasing similar information at some point.
Now, even if you hate MSFT (insert dollar signs /.ers), this lawsuit and the associated patent are a travesty. The concept behind the patent, and others such as the Amazon one click patent, is so broad that it basically precludes creating basic functionality which any software developer might reasonably come up with on their own. These software patents are unlike normal patents in that they cover ideas for things to do and not concrete ways of doing them. The end result will be stifled innovation, and tons of patents for things that are obvious extensions of base functionality rather than true innovations.