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Microsoft pays $200 million for VirnetX licence

Microsoft pays $200 million for VirnetX licence

The VirnetX patents Microsoft is accused of infringing are now legally licensed, but it's cost the company $200 million.

Microsoft has bought its way out of an embarrassing situation after being caught using VPN technology covered by a VirnetX-owned patent - and it's cost the company a pretty penny.

The company was found guilty of using technology originally developed by SAIC for the US Central Intelligence Agency and since patented and purchased by VPN specialist VirnetX in its Windows VPN subsystem back in March - as a result of which it was ordered to cease its infringement and pay the company $105.6 million in damages.

Sadly, that just wasn't an option for Microsoft: with all current versions of Windows featuring the patented VPN technology, to 'cease infringement' would have meant the withdrawal from sale of all copies of its operating system - an infeasible suggestion.

Accordingly, the company has just announced that it has, instead, reached a licensing agreement with VirnetX that sees it granted a irrevocable right to use the company's VPN technology and the dismissal of all active and pending lawsuits regarding the matter in exchange for a one-off payment of $200 million (around £135 million) - almost double the damages originally awarded by the court.

Microsoft's corporate vice president and deputy general counsel Tom Burt said in a statement that his company is "pleased to work with VirnetX to bring these cases to a successful resolution through this settlement," although both companies are keeping the precise details of the agreement quiet.

Do you believe this is a win for the little guy, or should Microsoft have fought its corner more forcefully over this one? Share your thoughts over in the forums.

14 Comments

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kingred 18th May 2010, 12:57 Quote
Winning.

Something Microsoft rarely does.
crazyceo 18th May 2010, 13:10 Quote
That's just loose change down the back of the sofa to Microsoft. A little payment to swat the flies away.

Makes perfect business sense. Well Done Microsoft!
blood69 18th May 2010, 13:10 Quote
$200 million?? It's a win for Microsoft, what do you think this company is, Apple??
$200 million for a technology that suits well the current range of Windows OS and facilitates the work of windows IT professionals.
Lockon Stratos 18th May 2010, 13:10 Quote
its not so much a case of winning lol. they were caught redhanded using patented technology then coughed up for damages & also the cost of the license fee to keep using the technology when put on the spot.

I bet some dude in M$ is saying to one of the directors "I told you this was a bad idea...."
Shagbag 18th May 2010, 13:14 Quote
Quote:
Microsoft's corporate vice president and deputy general counsel Tom Burt said in a statement that his company is "pleased to work with VirnetX to bring these cases to a successful resolution through this settlement," although both companies are keeping the precise details of the agreement quiet.
Says it all really. Microsoft bought their silence. Well done Microsoft, another 'win' for your shareholders. lol.
Aracos 18th May 2010, 13:47 Quote
Is that all current versions of windows 7 or windows in general AKA XP, Vista and 7? If it's the latter then the real winner here is obviously VirnetX. They've probably been sitting on this for ages waiting for the right time to accuse them of infringement and then demand something they can't possible do netting them more money :D

It's a good way to make money imo.
Blademrk 18th May 2010, 14:33 Quote
Every time I've tried to read the text of that article, I swear the face in the picture starts moving.

It makes for a great optical illusion (I think it's the blue background that does it), but it doesn't half make the eye's hurt after a while.
Mongoose132 18th May 2010, 14:58 Quote
Does that man have a smaller eye on the right side? D:
CharlO 18th May 2010, 16:40 Quote
Yeah, windows without the VPN is NOTHING. No company will ever get it. Should at least have added one or two zeros to that. ****. hate this, made awful my morning. Hate the way Microsoft operates.
Shagbag 18th May 2010, 19:07 Quote
Quote:
Originally Posted by CharlO
Yeah, windows without the VPN is NOTHING. No company will ever get it. Should at least have added one or two zeros to that. ****. hate this, made awful my morning. Hate the way Microsoft operates.
Yeah, but I bet you still buy their products.
RichCreedy 18th May 2010, 20:23 Quote
bet he doesn't 'BUY' them
Abdul Hadi 19th May 2010, 12:56 Quote
Giant's do try to use power somewhere for violations. Don't they? I mean see the chip giant "Intel"; after being sued by AMD of 1.25 billion USD. And now the software giant...... Hopeless as they just try to make money the easy way. but 200 million USD ain't bad for Microsoft.
Fizzban 19th May 2010, 14:41 Quote
Bit embarrassing for Microsoft to get caught. Though I'm sure they are used to embarrassment by now. They paid up though so that's fair enough I guess.
sub routine 19th May 2010, 15:42 Quote
Quote:
Originally Posted by Mongoose132
Does that man have a smaller eye on the right side? D:

I think hes actually winking at you.... hmmm
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