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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."
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.
I thought they had their own IP addresses...
cpghost at Cordula's Web.
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.
Yeah, because we all will go buy our things from patent trolls...
Look at the VirnetX website and look at the products http://www.virnetx.com/products.php it has very little other than patent licensing! While they do have a few real products, VirnetX is more or less a patent troll.
Taxation is legalized theft, no more, no less.
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.
Microsoft are patent trolls, so it's likely they either thought they'd already got a patent on the idea or that nobody else took patents seriously either.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
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.
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.
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..."
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.
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
To be a patent troll one would have to actually litigate against someone. Microsoft doesn't (it occasionally threatens to, but never actually does). By definition, they aren't a patent troll.
For a site about things like basic rights, Slashdot users sure do like to censor "dissent".
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.
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"
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.
For someone who's been around as long as you have, you sure are ignorant. Microsoft has indeed sued other companies for patents. It was covered quite a bit on Slashdot at the time. Don't go spreading the misinformation that Microsoft is a benign patent owner.
Qxe4
Erm tell that to Tomtom and a few others when it comes to FAT.