Microsoft $200 Million Settles VPN Patent Infringement Lawsuit

VirnetX sued software giant in 2007, won jury award for $105.75 million for violating patented VPN technology.

Microsoft Corp. said it will pay $200 million to VirnetX Holding Corp., a Scotts Valley, CA-based developer of technology for virtual private networks, to settle a 2007 patent infringement lawsuit and a subsequent filing charging the software giant incorporated VPN technology it did not own into its Windows and Office Communications Server products.

Under terms of the settlement, Microsoft said it will license VirnetX’s technology but neither party disclosed additional details.

Last March, a jury in U.S. District Court for the Eastern District of Texas sided with VirnetX in a patent infringement action it brought against Microsoft, awarding the small company $105.75 million, less than half of the $242 million it requested.

One day after the jury award, VirnetX filed a second lawsuit against Microsoft, alleging that Windows 7 and Windows Server 2008 R2 violated its VPN-related patents.

Last December, Microsoft asked the U.S. Patent and Trademark Office to reexamine the two VirnetX patents at issue in the case. This past January, the USPTO affirmed three claims of VirnetX’s patents and the company expected others would be confirmed as well.

Kendall Larsen, VirnetX chairman and chief executive, said that “we believe that this successful resolution of our litigation with Microsoft will allow us to focus on the upcoming pilot system that will showcase VirnetX’s automatic Virtual Private Network technology.”

TAGS: Microsoft,software,VPN,VirnetX,patent infringement

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