FULL PRODUCT VERSION :
java version "1.8.0_31"
Java(TM) SE Runtime Environment (build 1.8.0_31-b13)
Java HotSpot(TM) 64-Bit Server VM (build 25.31-b07, mixed mode)

ADDITIONAL OS VERSION INFORMATION :
Microsoft WIndows [Version 6.1.7601]

EXTRA RELEVANT SYSTEM CONFIGURATION :
Http / https connections outside of the corporate network are made through a proxy server.

A DESCRIPTION OF THE PROBLEM :
When launching an applet or running a JNLP page, the JRE takes several actions to connect to the outside before the application starts running:

1) It may need to load .jar files.
2) It may need to validate that code signing certificates have not been revoked.

In making those connections, Proxy server settings should be honored. They appear to be ignored, and DIRECT connections are always used.

The result of this is:

1) There are long delays while connection attempts time out (because the sites are not reachable through DIRECT connections.)
2) The application may not start because some .jar files cannot be downloaded.
3) The application may generate warning messages like: "The digital signature for this application was generated with a certificate from a trusted certificate authority, but we are unable to ensure that it was not revoked by that authority."

The general impact of this is that applets and webstart applications may not be usable in corporate enviroments on JDK 1.8u31.

REGRESSION. Last worked in version 8u25

ADDITIONAL REGRESSION INFORMATION:
java version "1.8.0_25"
Java(TM) SE Runtime Environment (build 1.8.0_25-b18)
Java HotSpot(TM) 64-Bit Server VM (build 25.25-b02, mixed mode)

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
1) Make sure you are on a network that requires outgoing connections to go through a proxy server.

2) Make sure your proxy server is appropriately configured in your web browser. (In our case, we are using a proxy.pac file. I don't know if that is significant.)

3) Configure java to use your web browser's proxy settings.

4) Using Internet Explorer, attempt to connect to the site: http://www.falstad.com/circuit

5) With JDK 1.8u31, the applet on the page will not start up.

6) In the Java console log, observe that all the network connections specify proxy=DIRECT:
network: Connecting http://www.falstad.com:80/ with proxy=DIRECT

7) Observe that the connection ultimately times out.

Running the same thing with JRE 1.8u25, observe that the applet starts up.

Also observe that all the netweork connections specify a proxy server:
network: Connecting http://www.falstad.com/circuit/circuit.jar with proxy=HTTP @ geoproxy.geo.mycompany.org/144.209.103.100:8080

This appears similar to the problems described in bug 8020390.



EXPECTED VERSUS ACTUAL BEHAVIOR :
EXPECTED -
The applet starts running.
ACTUAL -
The applet does not start running. It displays a message box saying ClassNotFoundException

ERROR MESSAGES/STACK TRACES THAT OCCUR :
Java Plug-in 11.31.2.13
Using JRE version 1.8.0_31-b13 Java HotSpot(TM) 64-Bit Server VM
User home directory = C:\Users\maxhearn
----------------------------------------------------
c: clear console window
f: finalize objects on finalization queue
g: garbage collect
h: display this help message
l: dump classloader list
m: print memory usage
o: trigger logging
q: hide console
r: reload policy configuration
s: dump system and deployment properties
t: dump thread list
v: dump thread stack
x: clear classloader cache
0-5: set trace level to <n>
----------------------------------------------------
basic: Added progress listener: sun.plugin.util.ProgressMonitorAdapter@52538940
security: Expected Main URL: http://www.falstad.com/circuit/circuit.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.falstad.com/circuit/circuit.jar
network: Cache entry not found [url: http://www.falstad.com/circuit/circuit.jar, version: null]
network: Connecting http://www.falstad.com/circuit/circuit.jar with proxy=DIRECT
network: Connecting http://www.falstad.com:80/ with proxy=DIRECT
java.net.ConnectException: Connection timed out: connect
at java.net.DualStackPlainSocketImpl.waitForConnect(Native Method)
at java.net.DualStackPlainSocketImpl.socketConnect(Unknown Source)
at java.net.AbstractPlainSocketImpl.doConnect(Unknown Source)
at java.net.AbstractPlainSocketImpl.connectToAddress(Unknown Source)
at java.net.AbstractPlainSocketImpl.connect(Unknown Source)
at java.net.PlainSocketImpl.connect(Unknown Source)
at java.net.SocksSocketImpl.connect(Unknown Source)
at java.net.Socket.connect(Unknown Source)
at sun.net.NetworkClient.doConnect(Unknown Source)
at sun.net.www.http.HttpClient.openServer(Unknown Source)
at sun.net.www.http.HttpClient.openServer(Unknown Source)
at sun.net.www.http.HttpClient.&lt;init&gt;(Unknown Source)
at sun.net.www.http.HttpClient.New(Unknown Source)
at sun.net.www.http.HttpClient.New(Unknown Source)
at sun.net.www.protocol.http.HttpURLConnection.getNewHttpClient(Unknown Source)
at sun.net.www.protocol.http.HttpURLConnection.plainConnect0(Unknown Source)
at sun.net.www.protocol.http.HttpURLConnection$6.run(Unknown Source)
at sun.net.www.protocol.http.HttpURLConnection$6.run(Unknown Source)
at java.security.AccessController.doPrivileged(Native Method)
at java.security.AccessController.doPrivileged(Unknown Source)
at sun.net.www.protocol.http.HttpURLConnection.plainConnect(Unknown Source)
at sun.net.www.protocol.http.HttpURLConnection.connect(Unknown Source)
at sun.plugin.PluginURLJarFileCallBack.connect(Unknown Source)
at sun.plugin.PluginURLJarFileCallBack.retrieve(Unknown Source)
at sun.net.www.protocol.jar.URLJarFile.retrieve(Unknown Source)
at sun.net.www.protocol.jar.URLJarFile.getJarFile(Unknown Source)
at sun.net.www.protocol.jar.JarFileFactory.get(Unknown Source)
at sun.net.www.protocol.jar.JarURLConnection.connect(Unknown Source)
at sun.plugin.net.protocol.jar.CachedJarURLConnection.connect(Unknown Source)
at sun.plugin.net.protocol.jar.CachedJarURLConnection.getJarFileInternal(Unknown Source)
at sun.plugin.net.protocol.jar.CachedJarURLConnection.getJarFile(Unknown Source)
at com.sun.deploy.security.DeployURLClassPath$JarLoader.getJarFile(Unknown Source)
at com.sun.deploy.security.DeployURLClassPath$JarLoader.access$800(Unknown Source)
at com.sun.deploy.security.DeployURLClassPath$JarLoader$1.run(Unknown Source)
at java.security.AccessController.doPrivileged(Native Method)
at com.sun.deploy.security.DeployURLClassPath$JarLoader.ensureOpen(Unknown Source)
at com.sun.deploy.security.DeployURLClassPath$JarLoader.<init>(Unknown Source)
at com.sun.deploy.security.DeployURLClassPath$3.run(Unknown Source)
at java.security.AccessController.doPrivileged(Native Method)
at com.sun.deploy.security.DeployURLClassPath.getLoader(Unknown Source)
at com.sun.deploy.security.DeployURLClassPath.getLoader(Unknown Source)
at com.sun.deploy.security.DeployURLClassPath.getResource(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader$2.run(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader$2.run(Unknown Source)
at java.security.AccessController.doPrivileged(Native Method)
at sun.plugin2.applet.Plugin2ClassLoader.findClassHelper(Unknown Source)
at sun.plugin2.applet.Applet2ClassLoader.findClass(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadClass0(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadClass(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadClass0(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadClass(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadClass(Unknown Source)
at java.lang.ClassLoader.loadClass(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadCode(Unknown Source)
at sun.plugin2.applet.Plugin2Manager.initAppletAdapter(Unknown Source)
at sun.plugin2.applet.Plugin2Manager$AppletExecutionRunnable.run(Unknown Source)
at java.lang.Thread.run(Unknown Source)
network: Cache entry not found [url: http://www.falstad.com/circuit/circuit.jar, version: null]
network: Connecting http://www.falstad.com/circuit/circuit.jar with proxy=DIRECT
network: Connecting http://www.falstad.com:80/ with proxy=DIRECT
java.net.ConnectException: Connection timed out: connect
at java.net.DualStackPlainSocketImpl.waitForConnect(Native Method)
at java.net.DualStackPlainSocketImpl.socketConnect(Unknown Source)
at java.net.AbstractPlainSocketImpl.doConnect(Unknown Source)
at java.net.AbstractPlainSocketImpl.connectToAddress(Unknown Source)
at java.net.AbstractPlainSocketImpl.connect(Unknown Source)
at java.net.PlainSocketImpl.connect(Unknown Source)
at java.net.SocksSocketImpl.connect(Unknown Source)
at java.net.Socket.connect(Unknown Source)
at sun.net.NetworkClient.doConnect(Unknown Source)
at sun.net.www.http.HttpClient.openServer(Unknown Source)
at sun.net.www.http.HttpClient.openServer(Unknown Source)
at sun.net.www.http.HttpClient.&lt;init&gt;(Unknown Source)
at sun.net.www.http.HttpClient.New(Unknown Source)
at sun.net.www.http.HttpClient.New(Unknown Source)
at sun.net.www.protocol.http.HttpURLConnection.getNewHttpClient(Unknown Source)
at sun.net.www.protocol.http.HttpURLConnection.plainConnect0(Unknown Source)
at sun.net.www.protocol.http.HttpURLConnection$6.run(Unknown Source)
at sun.net.www.protocol.http.HttpURLConnection$6.run(Unknown Source)
at java.security.AccessController.doPrivileged(Native Method)
at java.security.AccessController.doPrivileged(Unknown Source)
at sun.net.www.protocol.http.HttpURLConnection.plainConnect(Unknown Source)
at sun.net.www.protocol.http.HttpURLConnection.connect(Unknown Source)
at sun.plugin.PluginURLJarFileCallBack.connect(Unknown Source)
at sun.plugin.PluginURLJarFileCallBack.retrieve(Unknown Source)
at sun.net.www.protocol.jar.URLJarFile.retrieve(Unknown Source)
at sun.net.www.protocol.jar.URLJarFile.getJarFile(Unknown Source)
at sun.net.www.protocol.jar.JarFileFactory.get(Unknown Source)
at sun.net.www.protocol.jar.JarURLConnection.connect(Unknown Source)
at sun.plugin.net.protocol.jar.CachedJarURLConnection.connect(Unknown Source)
at sun.plugin.net.protocol.jar.CachedJarURLConnection.getJarFileInternal(Unknown Source)
at sun.plugin.net.protocol.jar.CachedJarURLConnection.getJarFile(Unknown Source)
at com.sun.deploy.security.DeployURLClassPath$JarLoader.getJarFile(Unknown Source)
at com.sun.deploy.security.DeployURLClassPath$JarLoader.access$800(Unknown Source)
at com.sun.deploy.security.DeployURLClassPath$JarLoader$1.run(Unknown Source)
at java.security.AccessController.doPrivileged(Native Method)
at com.sun.deploy.security.DeployURLClassPath$JarLoader.ensureOpen(Unknown Source)
at com.sun.deploy.security.DeployURLClassPath$JarLoader.<init>(Unknown Source)
at com.sun.deploy.security.DeployURLClassPath$3.run(Unknown Source)
at java.security.AccessController.doPrivileged(Native Method)
at com.sun.deploy.security.DeployURLClassPath.getLoader(Unknown Source)
at com.sun.deploy.security.DeployURLClassPath.getLoader(Unknown Source)
at com.sun.deploy.security.DeployURLClassPath.getResource(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader$2.run(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader$2.run(Unknown Source)
at java.security.AccessController.doPrivileged(Native Method)
at sun.plugin2.applet.Plugin2ClassLoader.findClassHelper(Unknown Source)
at sun.plugin2.applet.Applet2ClassLoader.findClass(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadClass0(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadClass(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadClass(Unknown Source)
at java.lang.ClassLoader.loadClass(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadCode(Unknown Source)
at sun.plugin2.applet.Plugin2Manager.initAppletAdapter(Unknown Source)
at sun.plugin2.applet.Plugin2Manager$AppletExecutionRunnable.run(Unknown Source)
at java.lang.Thread.run(Unknown Source)
network: Cache entry not found [url: http://www.falstad.com/circuit/Circuit.class, version: null]
network: Connecting http://www.falstad.com/circuit/Circuit.class with proxy=DIRECT
network: Connecting http://www.falstad.com:80/ with proxy=DIRECT
network: Cache entry not found [url: http://www.falstad.com/circuit/Circuit/class.class, version: null]
network: Connecting http://www.falstad.com/circuit/Circuit/class.class with proxy=DIRECT
network: Connecting http://www.falstad.com:80/ with proxy=DIRECT
java.lang.ClassNotFoundException: Circuit.class
at sun.plugin2.applet.Applet2ClassLoader.findClass(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadClass0(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadClass(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadClass(Unknown Source)
at java.lang.ClassLoader.loadClass(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadCode(Unknown Source)
at sun.plugin2.applet.Plugin2Manager.initAppletAdapter(Unknown Source)
at sun.plugin2.applet.Plugin2Manager$AppletExecutionRunnable.run(Unknown Source)
at java.lang.Thread.run(Unknown Source)
basic: load: class Circuit.class not found.
java.lang.ClassNotFoundException: Circuit.class
at sun.plugin2.applet.Applet2ClassLoader.findClass(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadClass0(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadClass(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadClass(Unknown Source)
at java.lang.ClassLoader.loadClass(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadCode(Unknown Source)
at sun.plugin2.applet.Plugin2Manager.initAppletAdapter(Unknown Source)
at sun.plugin2.applet.Plugin2Manager$AppletExecutionRunnable.run(Unknown Source)
at java.lang.Thread.run(Unknown Source)
Ignored exception: java.lang.ClassNotFoundException: Circuit.class
basic: Dialog type is not candidate for embedding
security: Reset deny session certificate store
basic: Removed progress listener: sun.plugin.util.ProgressMonitorAdapter@52538940
security: Reset deny session certificate store
basic: Dialog type is not candidate for embedding


REPRODUCIBILITY :
This bug can be reproduced always.

---------- BEGIN SOURCE ----------
Connect to this site (I don't have access to the source code): http://www.falstad.com/circuit
---------- END SOURCE ----------

CUSTOMER SUBMITTED WORKAROUND :
None that we've found.