Microsoft To Pay $200 Million In VPN Lawsuit

In March, a Texas jury ruled that Microsoft had willfully infringed on VirnetX's patented technology in Windows XP and Vista, The jury at that time recommended that Microsoft pay VirnetX $105.7 million, and the $200 million figure covers VirnetX's subsequent lawsuit pertaining to infringement in Windows 7 and Windows Server 2008 R2.

As part of the settlement, Microsoft will license VirnetX's technology, but other terms of the deal weren't disclosed.

Scotts Valley, Calif.-based VirnetX's case revolves around two VPN patents, one that covers a method of establishing a secure communication link in a VPN, the other that pertains to a method and system for creating a VPN session.

Microsoft is involved in another three-year-old patent infringement case with Toronto-based patent holding firm i4i over XML technology in Word and Office. A federal jury last August slapped Microsoft with a $290 million ruling in the case, and Microsoft has since had several of its subsequent appeals rejected.

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Last month, Microsoft asked the U.S. Patent and Trademark Office to review i4i's patents, but the agency found them to be valid. But Microsoft isn't ready to give up just yet: It could have settled this case a long time ago with the kind of pocket change payment it dished out to VirnetX, but the i4i case really seems to be getting under its skin.

Microsoft claims to have removed the infringing technology with a patch released in January, but i4i says it's not sure if the patch actually does so. Meanwhile, Microsoft says it's still considering its options in the case, which include petitioning the U.S. Supreme Court to take a look at the case.

Microsoft gets vilified every time it strong arms a small company that uses Linux in its products and gets it to sign a "patent cross licensing" agreement. The VirnetX and i4i cases show that Microsoft, like nearly every company in the IT industry, can sometimes have a misstep while navigating the minefield of technology patents.