Microsoft Licenses VirnetX Patents for $200 Million

Settles IP disputes

Microsoft has agreed to pay the VirnetX Holding Corporation no less than $200 million in order to license intellectual property that the U.S. District Court for the Eastern District of Texas had found it was infringing on. With the two companies now having settled their patent-infringement cases, both lawsuits would be dropped, the software giant indicated.

In mid-March 2010, a Texas jury awarded VirnetX $106 million, ruling that Microsoft had infringed on the company’s IP. The sum was nowhere in the vicinity of the damages VirnetX had asked for. However, with today’s settlement, Microsoft will pay almost double what the jury awarded VirnetX, but this sum is still less than the $242 million it could have lost.

“This Agreement highlights the need for VirnetX’s Secure Domain Name Initiative, and 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,” Kendall Larsen, chief executive officer and chairman of VirnetX Holding Corporation, noted. “We look forward to our continued work with our Secure Domain Name Initiative partners in that effort.”

Microsoft had previously declared itself little happy with the verdict that it had willfully infringed two VirnetX patents. According to the Texas jury, the Redmond company had illegally used automatic and secure virtual private network (VPN) technology in its products. The software giant had at one point even attempted to prove that the two patents that were at the base of the lawsuit No. 6,502,135 and No. 7,188,180 were invalid, but was unsuccessful in doing so.

“We are pleased to work with VirnetX to bring these cases to a successful resolution through this settlement,” Tom Burt, corporate vice president and deputy general counsel, Microsoft Corporation, added. “We look forward to VirnetX’s continued progress as it develops its technologies.”

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