News

Microsoft Settles VirnetX Patent Case for $200 Million

Microsoft announced today that it has settled a patent infringement case with California-based VirnetX Holding Corp. for $200 million.

According to a joint announcement, Microsoft will make a one-time payment to VirnetX and also license the company's intellectual property for use in Microsoft's products. No additional information about the settlement and license was disclosed.

The agreement on patents owned by VirnetX follows three years and two lawsuits. VirnetX's patents describe methods for establishing a secure communications link, as well as transparently creating a virtual private network (VPN).

VirnetX first sued Microsoft in February 2007 in the U.S. District Court for the Eastern District of Texas. The company claimed that Microsoft willingly infringed two of its patents by including VPN technology in Windows and Office Communications Server products.

VirnetX cited several Microsoft products in that suit, including Windows Server 2003, XP, Vista, Live Communications Server, Windows Messenger, Office Communicator and other versions of Office, according to an account by veteran Microsoft watcher Mary-Jo Foley.

The settlement comes after a jury had awarded VirnetX a $106 million verdict, announced on March 16, 2010. Microsoft officials had initially indicated that they would appeal that ruling, with Microsoft spokesperson Kevin Kutz saying at the time that the damages were "legally and factually unsupported." But VirnetX sued again. On the following day, March 17, 2010, VirnetX filed a second lawsuit, claiming that Windows 7 and Windows Server 2008 violated the same patents. Those products had not been released in 2007 when VirnetX filed the first lawsuit.

With today's announcement, the two companies have settled both lawsuits. Tom Burt, Microsoft's corporate vice president and deputy general counsel, said that Microsoft was pleased with resolving the matter.

The Texas court that heard VirnetX's lawsuit was the same venue that landed Toronto-based i4i a victory over "custom XML" technology used in Word and Office. i4i was awarded $200 million for willful patent infringement by Microsoft and the judge added an additional $90 million in penalties and interest. Microsoft indicated last week that it is considering its legal options after i4i's patent was upheld by the U.S. Patent and Trademark Office.

McKool Smith, the law firm representing VirnetX, also represented i4i, and the two cases had the same East Texas judge, Foley noted.

About the Author

Natasha Watkins is a New York-based freelance writer specializing in technology and business topics.

Featured

  • Azure Cost Management Now Commercially Available for Some Tenancies

    Microsoft on Monday announced that its Azure Cost Management feature had reached the "general availability" release stage for both Azure "pay-as-you-go" customers and Azure Government tenancies.

  • Microsoft Bringing Files Restore Capability to SharePoint Online and Teams

    Microsoft on Monday announced that it's delivering its Files Restore feature for SharePoint Online and Microsoft Teams to Office 365 tenancies as early as this month.

  • Microsoft Nabs IoT Platform Provider Express Logic

    As part of its plan to invest $5 billion in IoT technologies, Microsoft this week acquired Express Logic, which provides real-time operating systems for industrial embedded and IoT devices.

  • Dealing with Broken Dependencies in SCVMM

    Brien shows you how to resolve some broken, template-related dependencies in Microsoft's System Center Virtual Machine Manager.

comments powered by Disqus

Office 365 Watch

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.