Legal News

Microsoft, Hyundai, Cable TV: Intellectual Property

By (Breaking Legal News)

Microsoft Corp., the world?s biggest software maker, agreed to pay VirnetX Holding Corp. $200 million and license technology to communicate privately over the Internet, ending a patent dispute.

?We believe that this successful resolution of our litigation with Microsoft will allow us to focus on the upcoming pilot system? for a virtual private network, Chief Executive Officer Kendall Larsen said yesterday in a statement.

VirnetX, which won a $105.8 million jury verdict in its patent-infringement lawsuit in March, was seeking a court order to block Redmond, Washington-based Microsoft from continuing to use the technology in its Windows operating system and Communications Server. The jury award also could have been tripled by the court?s judge.

Microsoft argued at trial that the patents were valued at no more than $15 million. Investors bet the patents were worth more, driving Scotts Valley, California-based VirnetX?s share price up almost 300 percent in the past 12 months. VirnetX had a market value of $267.9 million, based on the May 14 price.

VirnetX had been public in its desire to be bought to resolve the dispute. The agreement in which it obtained the patents from defense contractor SAIC Inc. included a provision that SAIC would get 10 percent of any proceeds if VirnetX were acquired by Microsoft, according to a company regulatory filing.

The patents relate to use of a domain-name service to set up virtual private networks, through which a website owner can interact with a customer in a secure way or an employee can work at home and access a company?s files. The technology stemmed from work performed for the U.S. Central Intelligence Agency to develop secure communications, VirnetX said.

Full post as published by Breaking Legal News on May 18, 2010 (boomark / email).