Microsoft loses patent case against VirnetX

The verdict was announced Tuesday in the U.S. District Court for the Eastern District of Texas. Lawyers for VirnetX said $71.75 million will be paid for infringing one patent, and $34 million for the other.

However, Microsoft said it was highly disappointed by the decision of the jury as it did not violate any patents. The company further said that it would soon appeal for the same.

“We respect others’ intellectual property, and we believe the evidence demonstrated that we do not infringe and the patents are invalid,” said Kevin Kutz, a spokesman for Microsoft. “We believe the award of damages is legally and factually unsupported, so we will ask the court to overturn the verdict.”

The case
The two-year-old case, filed by VirnetX on Feb 15, 2007, was regarding the virtual private network (VPN) technology.

“The damage award is fair -- less than we were seeking but well within the range that is reasonable,” said VirnetX lawyer Douglas Cawley.

The verdict was announced Tuesday in the U.S. District Court for the Eastern District of Texas. Lawyers for VirnetX said $71.75 million will be paid for infringing one patent, and $34 million for the other.

However, Redmond, Washington-based Microsoft said the patents originated from defense contractor SAIC Inc.

Microsoft lawyer Matt Powers went on to say that SAIC tried to license the patents to various companies but researchers at Microsoft were able to come up with their own ways of making the connections before SAIC.

He further added that the patents were worth $15 million only.

About VirnetX
VirnetX, based in Scotts Valley, primarily gets its revenue from royalties on certain Internet-based communications.

The company recently recorded net operating losses and negative cash flows.

However, its share price has risen considerably in the past 12 months. Tuesday also saw Microsoft’s shares rise by 0.3 percent.