Microsoft has agreed to license two patents from Paltalk for technology that was integrated into a couple of titles from the Halo franchise. Paltalk had to take the Redmond company to court in order to get it to pay for using its intellectual property. The patent infringement lawsuit filed against the software giant was settled amicably in March 2009. Neither party revealed the terms of the settlement, wit no financial details shared with the public. Microsoft in fact failed to comment in any manner on settling the lawsuit with Paltalk.

The IP infringement lawsuit was filed initially on September 12, 2006. However, it took over two years for the patent dispute to go to trial, on March 9, 2009. But just four days after the trial was given the green light by the Eastern District of Texas, Microsoft and Paltalk settled the matter out of court. Essentially, the Redmond company agreed to pay Paltalk an undisclosed sum of money for the license to use the two patents involved in the IP infringement dispute in Halo 2 and Halo 3.

"After litigating with Microsoft for over two years to protect our intellectual property, it is gratifying to resolve this matter with Microsoft taking a license to Paltalk's patents," stated Jason Katz, founder and CEO of Paltalk.

Although the financial terms were not disclosed, Paltalk was initially looking to get no less than $90 million for patents numbers 5,822,523 and 6,226,686. The IP in question was acquired together with MPath Interactive in 2001 for $200.000. Both patents had been filed originally back in 1996.

“The Paltalk patents protect the company's proprietary technology platform that enables server group messaging for interactive applications on the internet. The technology has many applications, including video games, video conferencing and disseminating live communications from an organization to a large audience,” Paltalk explained.