Microsoft loses $106m patent infringement case

Microsoft has been ordered to pay $106 million in damages after losing a patent infringement case relating to real-time Internet communications technology.

A federal court in Texas ruled that the world’s largest software maker wilfully infringed the intellectual property of California-based developer VirnetX on two counts. 

The first, which concerned a method of creating a virtual private network (VPN) between two computers, resulted in Microsoft being forced to pay out $72 million, while the additional $34 million derived from the infringement of a patent for establishing a VPN via a secure domain name service. The total amount awarded could potentially be tripled by the court.

"We believe the evidence demonstrated that we do not infringe and the patents are invalid," said Kevin Kutz, a Microsoft spokesperson. Kutz claimed that the damages were "legally and factually unsupported", adding that Microsoft would challenge the penalty.

The VirnetX case dates back to early 2007 when the developer filed an amended complaint against Microsoft. In the time since then, Microsoft has been embroiled in a number of similar court actions. In April 2009, it was ordered to pay $388 million after patent row with anti-piracy software vendor Uniloc, and in December of the same year, Microsoft also lost a $290 million patent infringement case against Canadian firm i4i relating to Microsoft Office’s use of the XML document standard.

Peter Done

Peter Done is managing director of Peninsula Business Services, the personnel and employment law consultancy he set up having already built a successful betting shop business.

Related Topics