Microsoft Acquires VPN License with $200M Payout

Dennis Faas's picture

Microsoft recently lost its latest battle to have a $290 million decision over copyrighted Word XML functionality overturned. In a move to overcome another decision made against it earlier this year, the software giant has paid $200 million to VirnetX to keep that company quiet over its own patented technology.

Back in March, a Tyler, Texas jury found that Microsoft had infringed on a copyright owned by VirnetX. The patent involved virtual private network (or VPN) technology used in Microsoft's Windows XP and Vista operating systems. The Redmond-based firm was ordered to pay a hefty $105.7 million fine. (Source:

Microsoft Given License for All Versions of Windows

Well, it would seem that if you can't beat 'em, join 'em. Sort of. According to recent reports, Microsoft has purchased VirnetX's technology for $200 million, effectively keeping that company quiet on future VPN patent disputes. The $200 million will cover licenses affecting Windows 7 and Windows Server 2008 R2, too.

The finer points of the settlement have not yet been disclosed.

The patent case leading to the $105.7 million decision involved two patents owned by Scotts Valley, California's VirnetX. One is associated with the process of entering a safe connection via VPN, while the other has to do with the system used to open a VPN session. (Source:

Microsoft's i4i Case a Long Shot

Those who have been following the lawsuit can't help but draw some parallels with the i4i Word XML case. Not long ago, Microsoft challenged Toronto-based i4i's patent for the XML technology -- which is a web variant of programming language HTML -- used in its Word software, and lost. It now appears Microsoft is doomed to pay the $290 million it owes i4i, unless by some miracle it's granted a hearing in front of the Supreme Court.

And that's a long shot.

If there's one thing we can all take away from the VirnetX case, it's that Microsoft is at least willing to recognize the rightful owners of certain patents from time to time.

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