Microsoft headed back to East Texas to fight another patent infringement case

Summary:On March 8, Microsoft will be back in U.S. District Court in East Texas to defend itself against another patent-infringement case. The new case is being brought by real-time communications vendor VirnetX Inc. and involves two VirnetX patents which that company claims Microsoft is using improperly in Windows XP, Vista and Windows Server, among other products.

On March 8, Microsoft will be back in U.S. District Court in East Texas to defend itself against another patent-infringement case.

The new case is being brought by real-time communications vendor VirnetX Inc. and involves three VirnetX patents which that company claims Microsoft is using improperly in Windows XP, Vista and Windows Server, among other products.

The claims may be new, but the venue -- and the legal team representing VirnetX -- is all too familiar for Microsoft. The Tyler, Texas, courthouse has been the scene of many a patent lawsuit against not just Microsoft, but other tech companies as well.

Patent cases brought against Microsoft there include the Eolas Z4 and i4i cases. McKool Smith, the law firm representing VirnetX is the same one that represented i4i, which won a $200-million-plus patent-infringement verdict against Microsoft. Judge Leonard Davis, the same judge who presided over the i4i case, is the judge in the VirnetX matter.

The jury trial kicking off next week focuses on three two virtual-private-networking (VPN) patents VirnetX obtained between 2002 and 2007. (Update: The original suit covered three patents; the amended complaint only covers two.) One is for an "Agile Networking Protocol for Secure Communications with Assured System Availability." Another is for "“Method for Establishing Secure Communication Link Between Computers of Virtual Private Network Without User Entering Any Cryptographic Information." And the other is entitled, "Method for Establishing Secure Communication Link Between Computers of Virtual Private Network."

VirnetX claims that Microsoft is using its technology in Windows Server 2003, XP, Vista, Live Communications Server, Windows Messenger, Office Communicator and various versions of Office. (I'm not clear why or how Microsoft would be using VPN technology inside its Office suite, but that's what is listed in the complaint.) Update: One VirnetX shareholder told me Office is included because it makes use of Automatic Updates.

Microsoft has many networking patents of its own, including technologies that are part of the Microsoft point-to-point tunneling protocol.

VirnetX is seeking triple damages, injunctive relief and costs in the case. SAIC is named as an involuntary co-plaintiff in lawsuit, which VirnetX filed in 2007. (VirnetX, a subsidiary of VirnetX Holdings, is "focused on commercializing a patent portfolio for securing real-time communications over the Internet," explains the company in its November 10-Q.  "These patents were acquired by our principal operating subsidiary, VirnetX Inc., from Science Applications International Corporation.")

VirnetX is paying McKool a fixed fee of $3 million and a contingency fee of 8% of the litigation proceeds, according to its 10-Q. It also is counting in advance on its winnings from the Microsoft case to bail it out of tough financial straits, according to that document. "We anticipate that our lawsuit against Microsoft, with its related trial, will increase our monthly cash out flow," the company's management said.

The jury trial could last up to six is likely to last two weeks or less, with the final judgment coming months after that, followed by an appeals process.

Topics: Operating Systems, Legal, Microsoft, Networking, Software, Telcos, Windows

About

Mary Jo Foley has covered the tech industry for 30 years for a variety of publications, including ZDNet, eWeek and Baseline. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008). She also is the cohost of the "Windows Weekly" podcast on the TWiT network. Got a tip? Se... Full Bio

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