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Microsoft To Pay $200M In Patent Dispute
Pickens writes "eWeek reports that Microsoft has announced it will pay $200 million to settle a patent-infringement suit against it by VirnetX, which alleged that the software giant infringed on its patents related to communications, virtualization and collaboration technology. This payment represents a substantial markup from the $105.7 million that a Texas jury awarded in March when it found that Microsoft had infringed on two US patents held by VirnetX. Microsoft will license VirnetX technology for its own products. 'We believe that this successful resolution of our litigation with Microsoft will allow us to focus on the upcoming pilot system that will showcase VirnetX's automatic Virtual Private Network technology,' says Kendall Larsen, VirnetX Holding Corp.'s CEO. East Texas courts have a reputation as a good place to pursue intellectual property suits against larger corporations. While many of these cases seem to be settled out of court — or dismissed as totally frivolous — recent lawsuits such as those leveled by i4i and VirnetX are notable for at least extending to the Big Judgment phase."
The bigger you are, the less likely you are to see that every tiny thing you do is free of someone else's IP.
Even if they have to pay out a few hundred million here and there, I'm sure they make a lot more money
because of the barriers these patents cause to their opponents.
I am a free slashdotter. I will not be modded, blogged, DRM'd, patented, podcasted or RFID'd. My life is my own.
Personally I wouldn't push for money if I won a case against them, I would ask that Microsoft displays my company's name (if I had one) in big letters next to the product name. Free advertising and makes the point that it wasn't Microsoft's idea originally.
They patent everything because the system requires them to. You should blame the whole patent system instead.
It may be worth nothing that 200M is not *in addition to* the 100M from an earlier lawsuit: From TFA: "In a joint statement Monday, VirnetX and Microsoft announced that both lawsuits would be dismissed as part of the $200 million settlement. Microsoft will also license the VirnetX patents, the companies said." The summary doesn't seem intentionally misleading, but I did not gather this to be the case.
My other sig is clever.
Microsoft was walking across the street in a hurry and accidentally dropped $200,000,000.00 on the ground.
It didn't notice.
Requires them to? They could keep the technology under wraps as a Trade Secret, only disclosing the details to those who are willing to sign NDA's for it. This is, incidentally how software companies worked for literally decades and how many companies still work today. You won't find a patent application for the Coca-Cola recipe for instance.
Microsoft, and IBM and everybody else who is in any kind of position to be IP-trolled should _really_ be arguing that all software patents are invalid. So what if it thus invalidates their "investment" in software patents. They only spent that money to "repel boarders" in the IP wars anyway.
Funny thing that, the more you talk about patent trolling the more you get to analogies like "repel boarders". It's almost like "IP" stands for "Intellectual Piracy".
Hey big companies! Stop skirmishing and fight the war. Outlaw the Intellectual Piracy that matters. Outlaw the USPTO (at least in your bailiwick.)
Innocent people shouldn't be forced to pay for inferior software development.
--"Code Complete" Microsoft Press
Yeah well, for that to work, it would require companies to actually productize their inventions. Insanity!
Keeping a technology as a trade secret doesn't make you immune to patent litigation. This is why many companies have a defensive patent portfolio.
I wish you weren't right, but you hit the nail on the head. The system is broken and despite how it gets my blood boiling I find it difficult to blame corporate entities from taking advantage of the situation. IMHO the solution is to start recruiting people to the patent office that have a background in software. Maybe I'm a dreamer but I'd also like to see the patents written in plainer English rather than in the convoluted techno-jargon that makes swiping a screen to unlock a phone seem as complicated as rocket surgery.
"Never let your sense of morals prevent you from doing what is right" - Salvor Hardin
I thought recipes couldn't be patented.
I am a free slashdotter. I will not be modded, blogged, DRM'd, patented, podcasted or RFID'd. My life is my own.
I'm actually on the same side as Microsoft about something. I mean, given the choice between MS and a bunch of IP patent trolls, I'll side with the company that actually produces product every time.
This ain't rocket surgery.
East Texas courts have a reputation as a good place to pursue intellectual property suits against larger corporations
It is not actually that good.
See also this comment on a previous story.
Nice to see Microsoft being bitten in the ass by the same patent troll strategy they are adopting.
The much-needed fix to the software patent problem will only happen after the big companies repeatedly pay out more through patent enforcement than they gain from it.
The real problem is big companies, especially Microsoft have invested so much in filing millions of non-innovative, frivolous, obviously prior, stolen and open-ended patents, and have enough lawyers, lobbyists and paid-off politicians in their pocket that there's no hope of getting the patent law fixed until Microsoft want it to be.
What they are doing is creating a weapon. They won't go after Red Hat directly, so they will loose a bunch of lawsuits against patent trolls, and let the trolls try to go after Red Hat in hope that Red Hat won't survive the multiple lawsuits. Then they will have convince the word that Linux is fragile because stupid software patents.
They patent everything because the system requires them to. You should blame the whole patent system instead.
Yes, but who is this "you" that you speak of?
When nobody with the voice in the software industry is speaking against the patent system, it is hard to be heard. In fact most are speaking for it not against it.
Maybe the "you", and the blame that goes with it, should also be directed towards the big players that keep feeding the system.
I've always loved how at the end of a patent dispute, the company who's lost to the patent holder, agrees "to license the 'technology'. After the money is paid out, I wonder if there's really anything that gets passed back... Code samples? Flowcharts? Theory of operations? Punch cards? I would guess in most cases zip gets transferred - and not the compression algorithm...
Company1 - "Yeah, hi, this is Bob at company X - we recently licensed your technology that allows people to use a mouse to interact with a computation unit in a way that allows the computation unit to perform a useful task. We'd like to get the relevant documentation?"
Company2 - "Um, docs. Huh - never thought of that - I mean it's never come up... Wow, I guess you could read the patent application - that's the only docs we got. BTW, would you like to purchase rights to allow the mouse to instruct the computation unit to perform a useless task? We got a special going on this week for that..."
In a sense, some patents are recipes. Or, in some cases, the vague concept of a recipe.
SSC
Remember who was and is behind SCO? Remember who has been constantly threatening to sue Linux for infringing on its patents?
200 million is PEANUTS for MS, a very low price to pay for making sure nobody else can afford to enter the market. Wanna bet that 200 million goes to pursue further lawsuits?
MS will call for patent reform roughly at the same it stops with FUD and breaking standards. Software patents work for Microsoft. The occasional payoff is just the price for their way of doing business. If software patents are removed ANYONE can go into the software market. Not something MS would enjoy at all.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Microsoft=evil
Software patents=evil
Commence obligatory head explosions as we all realize that it's us, the average joe, that's losing in this battle.
"All great wisdom is contained in .signature files"
Patents are granted only on the basis that the inventor's investment must be protected from competition by competitors who have money to compete without the burden of paying to invent. There's no way the inventor spent over $200M to invent their invention. Now they have recouped all their investment, and a lot of profit.
So they don't need a patent to protect them from unfair competition anymore. Their patent should expire, and they should compete solely based on their product's superiority in the market.
--
make install -not war
Let's blame the people who lobbied for it too, like the ones who work for Microsoft. Let's also blame the groups like the Bill and Melinda Gates Foundation that push US-style patent laws on third-world countries in exchange for medicine.
I am TheRaven on Soylent News
Microsoft doesn't really care much about the $200m; yeah, it's going to dent their income a little, but they get something back for it: the technology cannot be used by open source software.
And in this case, that might matter. The patent is on a simple way of establishing VPNs. There are lots of applications for VPNs, but establishing them in the past has been pretty tough, so people haven't been using it much. I don't think the method described in the patent is particularly deep, but as far as patents go, it is more innovative than the average crap that gets patented.
If this becomes a widely-used standard and can't be worked around, it's a big problem for Linux because you might not be able to connect securely to much of anything.
Microsoft so far are one of the few companies that don't patent troll. They tend to use their portfolio as defensive patents.
Bullshit. Microsoft of course uses their patent portfolio offensively. The reason you don't see these things go to court is because they are so good at it. They have patent cross-license agreements with all the big players, and none of the little players have the resources to fight them. Microsoft has a huge patent portfolio.
If Microsoft wants money from you, they can come with a huge stack of patents and an army of lawyers and say: "Look, we think you violate this patent, but if you think you don't, here are another two dozen you probably violate. And these are the dozen lawyers that are going to tie your company and your employees up in knots for the next ten years with depositions and court dates, keep you from shipping your products, and give you bad press. Now, for just 5% of your revenue, you can save yourself all this trouble. Do the math: even if you eventually win it's cheaper. Any questions?"
The only people moderately immune from this are open source developers, because they can basically tell Microsoft to put their cards on the table or go f*ck themselves.
Live by the sword, die by the sword (or, in Microsoft's case, get a bunch of small cuts due to holding the sword wrong).
It's true no man is an island, but if you take a bunch of dead guys and tie 'em together, they make a good raft.
Blame and punishment is part of why the patent system is so awful.
The interrelated quality of ideas makes it very difficult to draw boundaries. That combined with the absolutism of this "winner take all" award system where one entity gets all the rewards while everyone else who was working towards similar or identical ideas not only gets nothing but may be forced to abandon years of effort makes for very ugly, expensive fights. It makes the stakes unnecessarily high. The thought behind the patent system is so individualistic and discrete. It's as if they thought invention occurs in a vacuum. Maybe in the days when the population of the world was 1/10 what it is now, it was less likely that people would be independently working on the same ideas. But it still happened. The thinking behind the system does not fit how many developments really come about, with layer upon layer of incremental improvements from many diverse and unrelated groups. So much advancement, possibly most advancement is seeing that an idea from one field can be applied to a problem in a seemingly unrelated field, or that 2 ideas from different areas can form a whole that is greater than the sum of the parts. Even when we can draw clear lines, it doesn't stop ugly, expensive fights breaking out over these monopolies. We tend to let the issue of whether there is prior art be settled in court, later, hoping that it never comes up at all. And the punishments discourage checking. We've also taken a destructive rent seeking approach to the granting of patents, seemingly to raise more money through the collection of more fees. Certainly generates more business for lawyers.
To design a product requires the application of not 1 or 2 or 10 patented ideas, but easily hundreds. The burden of negotiating terms with so many holders is so great that it isn't done. A horrible aspect of these monopoly grants is that holders don't have to deal. They can deny everyone the use of some idea, refusing to sell rights at any price whatsoever. Another possibility is holding a massive project to ransom, extracting not what an idea is really worth, but a big portion of what the massive project is worth, which may be far more than the idea. Imagine if on the eve of the first trip to the Moon, NASA had suddenly been forced to put the project on hold because some patent troll surfaced and got a court to issue an injunction. Millions of dollars of equipment sitting idle, thousands of people hastily assigned makeshift work or furloughed, windows of opportunity missed, and the public horrified by a delay over a trivial legal issue. Think that couldn't happen? Maybe because NASA is government it couldn't happen to them. But it nearly did happen to the Blackberry. SCO tried to hold Linux users-- users, who were not properly part of any alleged patent violations-- to ransom. That's like trying to sue drivers and owners of a particular model of car over something the manufacturer put in the car. Insane! Why does the patent system grant such extreme "remedy" power to the courts, and fail to consider the impact the application of a remedy can have on 3rd parties?
The entire tone of a patent lawsuit is that someone is trying to cheat patent holders by knowingly using their invention without permission. This assumes that patent searches can be done quickly and cheaply, which is not the case. Even after finding patents that may be related, considerable effort must be expended analyzing them to see if they really are related. The system acknowledges the impracticality of this by making damages for unintentional infringement much lighter. But they aren't zero. This further assumes that patents are fairly granted, and can be fairly granted, and don't have any other issues.
Cruel to routinely blame and punish the players to cover up the shortcomings of a bad system.
Intellectual Property is a monopolistic, selfish, and defective concept. It is "tyranny over the mind of man"
Before you condemn Microsoft for stealing someones IP you might want to look at both the companies current web site and the patents they are claiming to have been violated (689759, 6502135, 7188180)
How do you get away with including Windows XP in a suite when it was released BEFORE the earliest patent date?
The company even claims to hold the patent on "secure DNS"... Feeding trolls does not help society or advance technology even when it hurts a technology company you hate.
They patent everything because the system requires them to.
The "system requires them to" part is true, but, nonetheless, Microsoft (together with many other large corps) has filed several amicus curiae briefs in support of software patents in relevant court cases in U.S.
Requires them to? They could keep the technology under wraps as a Trade Secret, only disclosing the details to those who are willing to sign NDA's for it. This is, incidentally how software companies worked for literally decades and how many companies still work today. You won't find a patent application for the Coca-Cola recipe for instance.
I'm not loving your business plan. The problem with trade secrets is that prior art doesn't apply to non-public inventions. If someone else invents & patents it, I lose my right to do business selling my own invention, just because you came up with it second but decided to use the evil patent system while I remained pure.
Patenting everything gives you direct defense against someone else trying to trump you, plus the ability to counter-sue or threaten other companies who harass you, plus the ability to harass the competition. The last one is optional; the other two are essentially required for a large tech company.
If software patents weren't issued at all, then the trade secret approach would work fine. Hence the "blame it on the system" comment.
Yea, is it just me, or does microsoft seem to constantly be getting caught for stealing code? It's almost as if they could care less what the license says and just include it in their products because if they get caught they can afford to settle the dispute, but if they don't they get away with stealing and making a profit.
perhaps there should be someone (not a MS employee) hired to review code to see just how many infringements their are...
Before we recognize that the patent system is insane?
"When in doubt, use brute force." Ken Thompson
Serves the b'stard's right.
It's just you. What does a patent dispute have to do with stealing code?
Software patents, as practiced in the US, are a farce. It's practically impossible not to infringe them, unless your software does nothing non-trivial.
I am a free slashdotter. I will not be modded, blogged, DRM'd, patented, podcasted or RFID'd. My life is my own.
This is such a horrifically annoying statement.