Microsoft Pays to Settle Patent Case

Microsoft officials have decided to settle rather than continue to fight in the VirnetX patent-infringement case.

Microsoft has agreed to pay VirnetX - a company which sued Microsoft for infringing on its networking patents - $200 million, the pair announced on May 17.

The press release noted that "(a)s part of the settlement, Microsoft takes a license to the VirnetX patents for Microsoft's products and will make a one-time payment of $200 million to VirnetX." All other aspects of the settlement and license were not disclosed, the pair said.

VirnetX sued Microsoft in 2007, claiming Microsoft was using VirnetX's virtual private networking (VPN) patents without paying for their use. VirnetX cited Windows Server 2003, XP, Vista, Live Communications Server, Windows Messenger, Office Communicator and various versions of Office as infringing on two of its patents. After winning a first round in that case against Microsoft in March 2010, VirnetX filed an additional suit, claiming Microsoft's Windows 7 and Windows Server 2008 R2 also infringed on its networking patents.

A Texas jury on March 16 recommended Microsoft pay VirnetX $105.75 million for willfully infringing on two VirnetX networking patents. Microsoft officials said at that time they were appealing that ruling.

McKool Smith, the law firm representing VirnetX, was the same one that represented i4i, which won a $200-million-plus patent-infringement verdict against Microsoft. Judge Leonard Davis, the same judge who presided over the i4i case, was the East Texas judge overseeing the VirnetX case, as well.

VirnetX, a subsidiary of VirnetX Holdings, is "focused on commercialising a patent portfolio for securing real-time communications over the Internet," the company explained in its November 10-Q.

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