Microsoft pays $200 million to settle patent dispute

VirnetX a software company that owns patents for Virtual Private Networking (VPN) technology sued Microsoft for infringing on its patents. Microsoft will now settle the suit for $200 million according to InformationWeek. VirnetX claimed Microsoft was infringing on two of its VPN patents for automatic and secure VPN technology. The technology covered under the patents, created by VirnetX, was part of a security project they were working on for the Central Intelligence Agency.

The original complaint was filed February 15, 2007 by VirnetX and in March of this year a court in Texas ordered Microsoft to pay $106 million. After the verdict Microsoft said, "We respect others’ intellectual property, and we believe the evidence demonstrated that we do not infringe and the patents are invalid," according to Bloomberg.

Microsoft has since changed its mind and decided to end the legal battle by settling with VirnetX, the $200 million payment will give Microsoft a license to continue to use the technology in their products. Other aspects of the settlement were not disclosed. Companies including Cisco, Google, HP, AT&T, and Verizon and many others utilize their own VPN technology that may infringe on VirnetX's patents. This settlement could have a large impact on these companies, they may go to trial like Microsoft did originally or they may decide to bite the bullet and license the technology without a fight.

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34 Comments

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Mind Bender said,
I feel bad for Billy, he lost a few hours worth of making money for this dispute. *Sigh*
Too bad Gates doesn't own M$ like that anymore. It went public ages ago. Even though he owns quite a few stock shares over everyone else he isn't the soul one responsible for the company anymore unless called upon if M$ completely bottoms out I bet haha.

Morphine-X said,
Too bad Gates doesn't own M$ like that anymore. It went public ages ago. Even though he owns quite a few stock shares over everyone else he isn't the soul one responsible for the company anymore unless called upon if M$ completely bottoms out I bet haha.
Yep, just like those other companies:

Goog£e
App£e
$un
Orac£e
$u$e

My point is that saying "M$" is as ridiculous as finding the Pound sign (£) and putting it into Apple's name, or Google's, even though Apple makes more ridiculous profit margins than Microsoft and Google's not exactly hurting. These companies make money, and if they didn't, then none of us would be using this fancy HTML page.

Gates is now a full time philanthropist, and considering that Microsoft's stock didn't even go down yesterday (+0.01) and it's only down 0.01 today, I'd say they're doing okay (excluding the fact that Apple's market cap is quickly approaching theirs).

I know that it would cost Microsoft more to fight this, but I really wish somehow would take a stand against this. Does anyone know if this is even remotely legitimate or is this a holding company?

bluarash said,
I know that it would cost Microsoft more to fight this, but I really wish somehow would take a stand against this. Does anyone know if this is even remotely legitimate or is this a holding company?

Is a company partner of the CIA, or you could say, a shady company.

Let's say that you have a company that construct the most advanced infrared detector and decide to sell your products to the CIA.. sadly you can't do that, you must sell your products to a "x" company (proxy company), this company is allowed to sell your products and IP (relabeled) to the CIA.
So, it is not strange to see that some intelligence agencies are using outdated software and hardware because they are tied to a limited list of contractors.

Nightwind Hawk said,
I don't think VirnetX is worth even an eighth of that. They should've just bought them.

Heh, agreed. Was exactly my thoughts halfway through the article. I almost assumed after it said MS was ordered to pay 106$ mil, that the extra 94 mil was actually going to MS buying them out, and therefore the technology as well.

Recon415 said,

Heh, agreed. Was exactly my thoughts halfway through the article. I almost assumed after it said MS was ordered to pay 106$ mil, that the extra 94 mil was actually going to MS buying them out, and therefore the technology as well.

The extra is the penalty in using the patent in Windows 7.

KavazovAngel said,
Hey, anyone up for making a company, register some patent then sue Microsoft?

Great idea, I'm thinking "a method of allowing a user to interact with a software system using a collection of standardized visual elements".

omnicoder said,

Great idea, I'm thinking "a method of allowing a user to interact with a software system using a collection of standardized visual elements".

Hahah

omnicoder said,

Great idea, I'm thinking "a method of allowing a user to interact with a software system using a collection of standardized visual elements".

Nah how about "users looking at images through a monitor"

KavazovAngel said,

Hey, anyone up for making a company, register some patent then sue Microsoft?

+1

Edited by Gargamel1984, May 18 2010, 8:37am :

Sebianoti said,

all that money could help so many millions in Africa...

ya but what are they gonna do for the money? if MS makes them work for it they call it slave labour.

Sebianoti said,

all that money could help so many millions in Africa...

all that money could help pay for the oil mess for 10 days..

tablet_user said,

ya but what are they gonna do for the money? if MS makes them work for it they call it slave labour.

It's mentality like this that got America where it is today. Let's help EVERYBODY and save EVERYBODY else, even if it means we have to get China to fund it all. It's like we're trying to help people when we're not in a financial position to do so. So yes, why not make them work for their money? You cannot get something from nothing.

Sebianoti said,

all that money could help so many millions in Africa...

What about all the stock holders? Why doesnt anyone ever think of them? They are now out of all that money!

Magallanes said,

and the initial demand was for only $106 million.

Microsoft epic win! :-/

The initial was on XP and Vista as Win7 wasn't out yet. Win 7 cost Microsoft $94 mill.

Edited by ilev, May 18 2010, 2:15pm :

Magallanes said,

and the initial demand was for only $106 million.

Microsoft epic win! :-/

Don't think you read it right. The 106M was a settlement...the 200M includes licensing to keep using it. I wonder how much money the company was worth before the settlement. I also like to know how they come up with what is a fair price to pay?

TechieXP said,

Don't think you read it right. The 106M was a settlement...the 200M includes licensing to keep using it. I wonder how much money the company was worth before the settlement. I also like to know how they come up with what is a fair price to pay?

You didn't read it right. $106 mill. was court's fine on Microsoft which included only XP and Vista at the time. VirnetX was about to sue again for infringing it's patent on Win7 and Server 2008 too. Microsoft decided to settle out of court.