This is terrible news in my opinion. Hannibal at Ars Technica reports that the U.S. Patent and Trademark Office has upheld Eola's patent on embedded web applications. While the nominal target is Microsoft's ActiveX, the implications of this ruling can potentially be much wider. Hannibal concludes:

"I'm not going to do any doom-and-gloom speculation on what this victory means, especially when the infringement case is being appealed to the Supreme Court; I'll let you guys handle the speculation in the discussion thread. I'll just wrap up by noting that the '906 patent appears to be vague enough to cover almost any program that's embedded in a Web page and that talks bidirectionally with a server. That means not just Microsoft's ActiveX, the technology that originally brought on the round of Eolas vs. Microsoft infringement lawsuits, but Flash, Java, and most of the other stuff that makes the Web interesting to use. So there's no doubt that if the Eolas folks can take this fight all the way, they'll be very, very rich. It remains to be seen, however, just how much headache they'll cause for the rest of us as Microsoft and everyone else rushes to work around the patent."

A dark day. When this goes to the Supreme Court they'll hopefully see the implications and temper or nullify this decision.

eWEEK provides more background on today's events here.