In an undoubtedly hefty professional indemnity claim, software giants Microsoft have lost their lengthy legal battle against VirnetX Holding Corporation, paying out around $200 million in settlement fees.
The issue was violation of intellectual property rights, where VirtnetX – a California-based technology developer working on virtual private networks – claimed that Microsoft Corporation incorporated their VPN technology into some of their products without permission.
The patent infringement lawsuit was originally filed back in 2007, where the US District Court in Texas found that Microsoft had illegally used VirtnetX technology in their Windows and Office Communications Server products. They awarded the plaintiff less than half of their original damages claim – $105.75 million rather than $242 million – leading VirtnetX to file a second lawsuit against Microsoft the very next day.
In December 2009, Microsoft products were re-examined by the US Patent and Trademark Office, who confirmed that patent infringement was a viable issue in the products VirtnetX had flagged up. Fearing that many more patent problems would emerge; Microsoft settled the case for $200 million and agreed to licence the VPN technology. No more details have yet been announced.