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Microsoft Patents The Almighty Buck The Courts News

Microsoft To Pay $200M In Patent Dispute 81

Posted by Soulskill from the check's-in-the-mail dept.
Pickens writes "eWeek reports that Microsoft has announced it will pay $200 million to settle a patent-infringement suit against it by VirnetX, which alleged that the software giant infringed on its patents related to communications, virtualization and collaboration technology. This payment represents a substantial markup from the $105.7 million that a Texas jury awarded in March when it found that Microsoft had infringed on two US patents held by VirnetX. Microsoft will license VirnetX technology for its own products. '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,' says Kendall Larsen, VirnetX Holding Corp.'s CEO. East Texas courts have a reputation as a good place to pursue intellectual property suits against larger corporations. While many of these cases seem to be settled out of court — or dismissed as totally frivolous — recent lawsuits such as those leveled by i4i and VirnetX are notable for at least extending to the Big Judgment phase."
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Microsoft To Pay $200M In Patent Dispute More

Microsoft To Pay $200M In Patent Dispute

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  • The bigger you are, the less likely you are to see that every tiny thing you do is free of someone else's IP.

    • Re: (Score:3, Funny)

      by cpghost ( 719344 )
      I thought they had their own IP addresses...

    • Re: (Score:3, Interesting)

      by jd ( 1658 )

      Microsoft are patent trolls, so it's likely they either thought they'd already got a patent on the idea or that nobody else took patents seriously either.

      • Re: (Score:2, Insightful)

        by Kalriath ( 849904 )

        To be a patent troll one would have to actually litigate against someone. Microsoft doesn't (it occasionally threatens to, but never actually does). By definition, they aren't a patent troll.

      • Microsoft IS. Not ARE. Microsoft IS a singular corporate entity that employs many people. Microsoft is NOT legion. Yet.

        This unsolicited pedantry were brought to you by Muphry.

    • The bigger you are, the less likely you are to see that every tiny thing you do is free of someone else's IP.

      With v6, that will change. You wait and see.

  • Personally I wouldn't push for money if I won a case against them, I would ask that Microsoft displays my company's name (if I had one) in big letters next to the product name. Free advertising and makes the point that it wasn't Microsoft's idea originally.

    • Re:Money (Score:5, Insightful)

      by Darkness404 ( 1287218 ) on Monday May 17, 2010 @05:06PM (#32244588)
      Yeah, because we all will go buy our things from patent trolls...

      Look at the VirnetX website and look at the products http://www.virnetx.com/products.php [virnetx.com] it has very little other than patent licensing! While they do have a few real products, VirnetX is more or less a patent troll.
    • I would demand money. I sincerely doubt that VirnetX could possibly make more than $200M from the patents in question. They also get free news advertising anyway. I'd never heard of them before today.

  • Clarification (Score:5, Informative)

    by dward90 ( 1813520 ) on Monday May 17, 2010 @05:05PM (#32244582)
    It may be worth nothing that 200M is not *in addition to* the 100M from an earlier lawsuit: From TFA: "In a joint statement Monday, VirnetX and Microsoft announced that both lawsuits would be dismissed as part of the $200 million settlement. Microsoft will also license the VirnetX patents, the companies said." The summary doesn't seem intentionally misleading, but I did not gather this to be the case.

  • Microsoft was walking across the street in a hurry and accidentally dropped $200,000,000.00 on the ground.

    It didn't notice.

  • Microsoft, and IBM and everybody else who is in any kind of position to be IP-trolled should _really_ be arguing that all software patents are invalid. So what if it thus invalidates their "investment" in software patents. They only spent that money to "repel boarders" in the IP wars anyway.

    Funny thing that, the more you talk about patent trolling the more you get to analogies like "repel boarders". It's almost like "IP" stands for "Intellectual Piracy".

    Hey big companies! Stop skirmishing and fight the war.

    • Remember who was and is behind SCO? Remember who has been constantly threatening to sue Linux for infringing on its patents?

      200 million is PEANUTS for MS, a very low price to pay for making sure nobody else can afford to enter the market. Wanna bet that 200 million goes to pursue further lawsuits?

      MS will call for patent reform roughly at the same it stops with FUD and breaking standards. Software patents work for Microsoft. The occasional payoff is just the price for their way of doing business. If softwa

      • Re: (Score:3, Interesting)

        by dave562 ( 969951 )

        You bring up a good point. I see the settlement as Microsoft validiating the enforcability of patents. They get to go on record as being okay with paying to license patented technology. In the future when they go after other companies for patent infringement, they can say something to the effect of, "We didn't make the system, and in fact it hurts us too. Remember when we paid $200 million?"

  • I'm actually on the same side as Microsoft about something. I mean, given the choice between MS and a bunch of IP patent trolls, I'll side with the company that actually produces product every time.

  • East Texas (Score:3, Informative)

    by harlows_monkeys ( 106428 ) on Monday May 17, 2010 @05:28PM (#32244908) Homepage

    East Texas courts have a reputation as a good place to pursue intellectual property suits against larger corporations

    It is not actually that good. [patentlyo.com]

    See also this comment [slashdot.org] on a previous story.

    • Re: (Score:2, Insightful)

      by MozeeToby ( 1163751 )

      Their analysis doesn't work because a patent suit filed in district X is not likely to be the same as a patent suit filed in district Y. If I have an open and shut case, I'll probably file my suit wherever it is most convenient or cheapest for me to do so. If I have a case that I feel I may or may not win, I'll shop around for the district that balances my chances of winning with the additional expenses. If I intend to make my entire enterprise out of suing other people for patent infringement, I'll set

      • Re: (Score:2)

        by tsm_sf ( 545316 )
        IANAL, and I don't get why a regional court gets to decide national matters. Is this working as intended?

  • Nice (Score:2, Insightful)

    by JustNiz ( 692889 )

    Nice to see Microsoft being bitten in the ass by the same patent troll strategy they are adopting.

    The much-needed fix to the software patent problem will only happen after the big companies repeatedly pay out more through patent enforcement than they gain from it.

    The real problem is big companies, especially Microsoft have invested so much in filing millions of non-innovative, frivolous, obviously prior, stolen and open-ended patents, and have enough lawyers, lobbyists and paid-off politicians in their poc

    • Re: (Score:1, Troll)

      by bloodhawk ( 813939 )
      Microsoft so far are one of the few companies that don't patent troll. They tend to use their portfolio as defensive patents.
      • That depends on your definition of troll. They don't demand money for many patents (VFAT being a notable example), but they definitely use the threat of patent infringement suits to discourage competitors.

      • offensive Microsoft patents (Score:4, Insightful)

        by yyxx ( 1812612 ) on Monday May 17, 2010 @09:07PM (#32247598)

        Microsoft so far are one of the few companies that don't patent troll. They tend to use their portfolio as defensive patents.

        Bullshit. Microsoft of course uses their patent portfolio offensively. The reason you don't see these things go to court is because they are so good at it. They have patent cross-license agreements with all the big players, and none of the little players have the resources to fight them. Microsoft has a huge patent portfolio.

        If Microsoft wants money from you, they can come with a huge stack of patents and an army of lawyers and say: "Look, we think you violate this patent, but if you think you don't, here are another two dozen you probably violate. And these are the dozen lawyers that are going to tie your company and your employees up in knots for the next ten years with depositions and court dates, keep you from shipping your products, and give you bad press. Now, for just 5% of your revenue, you can save yourself all this trouble. Do the math: even if you eventually win it's cheaper. Any questions?"

        The only people moderately immune from this are open source developers, because they can basically tell Microsoft to put their cards on the table or go f*ck themselves.

    • not nice at all (Score:2, Interesting)

      by yyxx ( 1812612 )

      Microsoft doesn't really care much about the $200m; yeah, it's going to dent their income a little, but they get something back for it: the technology cannot be used by open source software.

      And in this case, that might matter. The patent is on a simple way of establishing VPNs. There are lots of applications for VPNs, but establishing them in the past has been pretty tough, so people haven't been using it much. I don't think the method described in the patent is particularly deep, but as far as patents g

      • Re: (Score:2)

        by JustNiz ( 692889 )

        >> they get something back for it: the technology cannot be used by open source software.

        They are only a licencee of the technology. They have no control over the technology itself or if the owning company sells it to anyone else too.

  • They're faking it (Score:5, Interesting)

    by emoreau ( 1247650 ) on Monday May 17, 2010 @05:34PM (#32245028)
    What they are doing is creating a weapon. They won't go after Red Hat directly, so they will loose a bunch of lawsuits against patent trolls, and let the trolls try to go after Red Hat in hope that Red Hat won't survive the multiple lawsuits. Then they will have convince the word that Linux is fragile because stupid software patents.
    • Comment removed based on user account deletion

    • Then they will have convince the word that Linux is fragile because stupid software patents

      No, they'll have convinced the USA that Linux is fragile because of stupid software patents and they'll have convinced software companies in the rest of the world not to do business in the USA.

    • Correction: they are funding the trolls to go after Red Hat (et al). $200 million buys you a lot of lawyering. Heck, it buys you a lot of judges.

  • Will license the "technology" (Score:4, Funny)

    by NeumannCons ( 798322 ) on Monday May 17, 2010 @05:50PM (#32245290) Homepage
    I've always loved how at the end of a patent dispute, the company who's lost to the patent holder, agrees "to license the 'technology'. After the money is paid out, I wonder if there's really anything that gets passed back... Code samples? Flowcharts? Theory of operations? Punch cards? I would guess in most cases zip gets transferred - and not the compression algorithm...

    Company1 - "Yeah, hi, this is Bob at company X - we recently licensed your technology that allows people to use a mouse to interact with a computation unit in a way that allows the computation unit to perform a useful task. We'd like to get the relevant documentation?"

    Company2 - "Um, docs. Huh - never thought of that - I mean it's never come up... Wow, I guess you could read the patent application - that's the only docs we got. BTW, would you like to purchase rights to allow the mouse to instruct the computation unit to perform a useless task? We got a special going on this week for that..."

    • I wonder if there's really anything that gets passed back... Code samples? Flowcharts? Theory of operations? Punch cards? I would guess in most cases zip gets transferred - and not the compression algorithm...

      It's IP. If you were thinking about anything tangible, or even sensible (as in, detectable to the senses), UR DOIN IT RONG (to quote Ceiling Cat).

      The only thing that passes back is permission. And perhaps the opportunity for a little revenge.

      MS: "Here's your $200 million."
      VirnetX: "Great, I now give

  • Microsoft=evil
    Software patents=evil

    Commence obligatory head explosions as we all realize that it's us, the average joe, that's losing in this battle.

  • Patents are granted only on the basis that the inventor's investment must be protected from competition by competitors who have money to compete without the burden of paying to invent. There's no way the inventor spent over $200M to invent their invention. Now they have recouped all their investment, and a lot of profit.

    So they don't need a patent to protect them from unfair competition anymore. Their patent should expire, and they should compete solely based on their product's superiority in the market.

    • Er, no. I am a wireless communications intellectual property forensic analyst.

      Patents are granted for something novel, non-obvious, filed in time, and useful. A patent grants the right to the owner to prevent others from making, using, selling, offering to sell, or importing the claimed invention. Contrary to popular belief, a patent does not grant the owner the right to practice the invention. Why? Simply because this might require the use of technology patented by someone else!

  • Live by the sword, die by the sword (or, in Microsoft's case, get a bunch of small cuts due to holding the sword wrong).

  • Before you condemn Microsoft for stealing someones IP you might want to look at both the companies current web site and the patents they are claiming to have been violated (689759, 6502135, 7188180)

    How do you get away with including Windows XP in a suite when it was released BEFORE the earliest patent date?

    The company even claims to hold the patent on "secure DNS"... Feeding trolls does not help society or advance technology even when it hurts a technology company you hate.

  • Before we recognize that the patent system is insane [cat-v.org]?

  • Serves the b'stard's right.

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