Microsoft loses another patent suit, must pay $105 million

By on March 17, 2010, 2:49 PM
Microsoft has suffered another legal blow, yet again for patent infringement. A Texas court on Tuesday ordered the software giant to pay $105.75 million to VirnetX for violating two patents (6,502,135 and 7,188,180) pertaining to VPN technology, which has supposedly been used in products including Windows XP, Vista, Office, and Windows Messenger.

VirnetX initially sought $242 million, but the company's lawyer deemed the award "fair" and "will within the range that is reasonable." Nonetheless, since Microsoft was found guilty of willful infringement, the judge could as much as triple the jury's award.

Naturally, Redmond isn't pleased with the ruling and it plans to appeal. "We respect others' intellectual property, and we believe the evidence demonstrated that we do not infringe and the patents are invalid," said Microsoft's Kevin Kutz.

This loss comes just after Microsoft's failed appeal in the patent infringement case against Canadian company i4i. In that suit, Redmond faced a sales injunction against Word, and will have to dole out $290 million in penalties.




User Comments: 32

Got something to say? Post a comment
Vrmithrax Vrmithrax, TechSpot Paladin, said:

I guess Microsoft's legacy of building their house using other peoples' bricks, instead of creating their own bricks, is finally starting to sting them...

Guest said:

I swear there really needs to be a patent reform in this day of age. Reading the patents, it's not something so "unique" like a specific code being used, but more like technique and requirements to be met.

Frakking ridiculous.

Clrabbit said:

I agree I don't like a bit of the stuff MS dose but really, these suits are getting just out right out of hand. If any body actually read the clams and patient's i4i used to sue MS you'd see there 100% BS.

A reform needs to happen there are to many things copyrighted that really just should not be copyrightable. In the current system you could nearly patient the use of BOLD font style and sue every company that includes bold settings for font. that's about how stupid most of the stuff going on today is.

Burty117 Burty117, TechSpot Chancellor, said:

I kinda feel for Microsoft. Plus i've been reading into a few of these cases and some Microsoft just didn't really have the evidence to backup their claim but this one they do by the jist of things. You can hate microsoft all you want but for many they have created an amzing OS which was a lot of people's first time using an OS was Windows. I know they're rich and powerful but suing them constantly for "infinging" a patent that is stupidly vague or are invalid is ridiculous! I bet the companies sueing them are using microsoft products for their everyday use anyway!

Plus Microsoft have huge legal teams that make sure their own work gets patented when needed and that they are not treading on anyone elses toes! if this "valid" patent was soo important to the company why not sue them back when XP was lunched? Since they claim that also features the patent infinging software.

elroacho72 said:

Vrmithrax said:

I guess Microsoft's legacy of building their house using other peoples' bricks, instead of creating their own bricks, is finally starting to sting them...

Says it all.

But picking on the kid who puts the pieces of puzzle together when no else can, is kind of my other half of my thinking here. I do like MS products and preferr them over Mac.

TomSEA TomSEA, TechSpot Chancellor, said:

Dang...missed out again. I really need to sit down and write up some generic code for MS to use so I can sue them for a brazillion dollars in a year or two.

Wagan8r Wagan8r said:

I'd like to know how they arrived at the $242 million. It seems to me that judges are less concerned about the intent of the law and more concerned about sticking it to the big guys.

I wonder if I could patent "ridiculous patent infringement lawsuits". That way, I could sue for patent infringement those who makes a ridiculous patent infringement lawsuit. I love the irony in that.

boyese said:

I wonder how many of these get settled out of court and how much this costs M$?

Vrmithrax Vrmithrax, TechSpot Paladin, said:

wagan8r said:

I'd like to know how they arrived at the $242 million. It seems to me that judges are less concerned about the intent of the law and more concerned about sticking it to the big guys.

In cases like these, it's usually based on sales of the infringing product. So, say they figure a royalty of $2 per copy of Windows Vista, and there's 120 million copies sold domestically... Plus the legal fees, of course... Anyhow, you probably get the picture, and the initial estimates were punitive damages in the BILLIONS, so this is a drop in the bucket. And when you look at the actual pittance MS could have agreed to pay per copy (if they hadn't been just stealing someone else's patented process) it's pretty pathetic. But, it's also not surprising, there's a long track record of exploited victims littering the trail behind Microsoft's bulldozer mentality - they just rarely get caught without enough BS in their arsenal to talk their way out of trouble.

And yah, I know lots of lawsuits these days are frivolous, but this one (and the iQi one) deal with blatant use of a patented and proprietary methodology or code structure, which those infringed-upon companies spent large amounts of time and resources developing. These aren't companies using the ambulance-chaser "throw a patent wall up" tactic like many of the big corporations do in case they can reel in some cash with them later. In the case of VirnetX, if this case fails, so (probably) does the company. It's their bread and butter, and they are being ripped off. Period. The fact that MS, with all its resources, couldn't find relevant prior art to invalidate their patent is very telling...

Guest said:

I find it hard to be too sympathetic for Microsoft. They've done plenty of damage to countless other companies, some just financial and some they callously drove out of business. Microsoft enforces its monopoly status with an iron fist, this self-serving approach is quite stifling to the tech community overall. The rest of the world is zooming past the U.S. in a lot of tech fields, very depressing since we had such a good run at birthing many of them. Between an extremely screwed up patent system and corporate ideology like Microsoft's, our days as a computer tech leader are waning. Sadly, American hubris prevents us from seeing things in a broader perspective.

CMH, TechSpot Chancellor, said:

I must say Microsoft looks like a big giant target for anyone who wants to make money on the courts.

jasonk1229 said:

microsoft what are you doing

Deso said:

It's funny to see M$ bite the dust, we all knew they did nothing themselves but this is just hilarious

pipopaz said:

Agree with the reform sentiment, in my opinion it brings monopoly to one type of gadget/software/whatever it is about. Let's take for example the legal battle between Google Nexus One and the Iphone (not planning to start a long discussion only pointing to a general concept.) If apple wins, it means no one can create a phone that will look like the iphone, but my main point is where the line is, it is not explicitly drawn, meaning they could fire at someone else product for something they justify.

rufio said:

not sure if we can blame m$ for this on. there seems to be a patent for everything these days. probably just just pocket change for m$ anyways

raybay said:

Microsoft has such a big squad of a legal staff, and the research people to go with them... It appears that Microsoft has lost many of these confrontations by assuming they would not get caught with the goods.

This is a management problem, and you know who all those managers are if you do any reading at all. I am glad to be rid of their stock, because I think they have a few more lessons to learn.

They do not deserve our pity nor our support for this side of their business.

Yoda8232 said:

Summary: Microsoft needs better lawyers/legal staff or be more smart when making a program with/based "maybe" someone else's product.

Relic Relic, TechSpot Chancellor, said:

I'm also on the side of patent reform, it just doesn't seem logical at all and counter intuitive to innovation. As pointed out by a guest above we seem to invent and lead in many industries and then fall behind because of nonsense like this and big business taking over everything. Microsoft definitely caries fault for some of it as they've done plenty of bad, but if other companies troll after them they are no better.

buendia said:

This patent system! Everyone sues everyone. It think it's just a mess.

Thompson said:

Microsoft is one of the worst Copyright Infringers in the world, the amount of lawsuits they face is ridiculous.

Kovach said:

They are just playing cat and mouse game, and thinking that cat will not catch them. They have money, they will pay it without problems.

rskapadia2294 said:

i think its a bad time for microsoft!

i think the money they wasted on such things could be utilised to develop more good os and software's!

microsoft - what has gone wrong with you?

Vrmithrax Vrmithrax, TechSpot Paladin, said:

The patent process is indeed a mess, for a variety of reasons. Realistically, patents need to be a bit more difficult to get, and actually be verified as valid. These days, blankets of patents are thrown into the system and approved, and many of them are easily invalidated by prior art or existing applications - the problem is, someone has to challenge the patent and prove it in court, which is where all the lawsuits come from. Honestly, the "valid until challenged" mentality is what encourages lawsuits, and makes lawyers a fortune.

There also needs to be revision in the punishment side. Infringing companies who are caught with their hand in the cookie jar regularly just get what is effectively a mild slap on the wrist. Even guilty companies can throw up walls of paper and lawyers that are so thick that it takes too long to reach a conclusion, or the victim whose property was stolen just gives up. Patent punishments and proceedings actually protect the guilty more than they do the ones being infringed upon, which makes it almost an afterthought for corporations... "Another lawsuit? Ah well, so what, carry on." There needs to be a serious ramping up of reparations and penalties, so that guilty parties don't just feel a sting, they get an arm ripped off. Set a few precedents where big bully companies get knocked into the dirt and have their business jeopardized, and people will start to think about consequences... Of course, that will ONLY work if the patent process itself is made more thorough (as I said above) to discourage opportunistic "patent net casting" techniques that are common today.

flocka said:

i really dont beleive they knowingly, and willingly copied someones else product. This is microsoft, probably around before either of these two companies. They lose these cases because of who, and what they are. SOmething like athletes, and famous entertainers....

EduardsN said:

Have seen alot of this lately, everyone sues everyone its just crazy

levar said:

Another patent!!?! Come on M$ I really don't care anymore Microsoft needs to get its act up its one after the other. The i4i, now VirnetX! Who's next? In my last comment in the previous related article I said something about them losing or gaining profit from selling Office..etc now I think they're just all of it. But they'll survive they got money but how much more do they have for all this? I wonder if the the patents are invalid :/ good luck M$

ansarimikail said:

Wonder what they do besides infringing. They should have enough dough to cover it from Win7 being fastest OS seller and all.

Jay Pfoutz Jay Pfoutz, Malware Helper, said:

Not that Microsoft deserves it, but they need to realize that they do not need to be the king of technology. There are great entrepreneurs out there that Microsoft is stealing from. I think personally, they should start creating their own stuff and own variations, so they do not end in messes such as this.

captaincranky captaincranky, TechSpot Addict, said:

Not that Microsoft deserves it, but they need to realize that they do not need to be the king of technology. There are great entrepreneurs out there that Microsoft is stealing from. I think personally, they should start creating their own stuff and own variations, so they do not end in messes such as this.
Let's assume I agree that M$ is the evil empire. However, I sometimes wonder if their software engineers propagate the theft, by passing off the work of others more clever than themselves, as their own. It is possible that some of this could happen without corporate knowledge. I suppose that it's also possible for two people to "write the same song", as it were. Not likely, but possible.

Then again, it's also possible that from time to time, a few M$ suits head into a conference room ,light up some cigars, and put their minds into how they could steal something they want without being caught.

9Nails, TechSpot Paladin, said:

captaincranky said:

Let's assume I agree that M$ is the evil empire. However, I sometimes wonder if their software engineers propagate the theft, by passing off the work of others more clever than themselves, as their own. It is possible that some of this could happen without corporate knowledge. I suppose that it's also possible for two people to "write the same song", as it were. Not likely, but possible.

Then again, it's also possible that from time to time, a few M$ suits head into a conference room ,light up some cigars, and put their minds into how they could steal something they want without being caught.

With all the crap patents out there, I don't think that you can write any code without infringing on someone else's design these days. I don't think the patent office actually patents a song, based on lyrics. But instead patents what is expressed in the song. And now you don't have to prove that Microsoft used your lyrics, only that it wrote a song about trains, momma, and the pick-up truck. And if you got there first, you win.

captaincranky captaincranky, TechSpot Addict, said:

I don't think the patent office actually patents a song, based on lyrics. But instead patents what is expressed in the song. And now you don't have to prove that Microsoft used your lyrics, only that it wrote a song about trains, momma, and the pick-up truck. And if you got there first, you win.
This is a great analogy!

compdata compdata, TechSpot Paladin, said:

I am pretty curious how they determine damages on cases like this? Is it based on the percentage of code that was based on the patent vs the total amount of code times the amount of sales? $100 million is a lot of money, but really not that significant for MS.

Load all comments...

Add New Comment

TechSpot Members
Login or sign up for free,
it takes about 30 seconds.
You may also...
Get complete access to the TechSpot community. Join thousands of technology enthusiasts that contribute and share knowledge in our forum. Get a private inbox, upload your own photo gallery and more.