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

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.

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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 has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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11 comments
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  • Trolls in Texas

    Any company that describes themselves as ?focused on commercializing a patent portfolio...? is trolling. At least i4i had a real product.
    MSFT_Tinkering
    • don't mess with texas

      M$ is a known thief of other people's IP, and the texans know that.
      Now it's time to face the music.
      Linux Geek
      • @Linux Geek

        I'm no big fan of Microsoft, however I do use Windows everyday and I like it, not as much as OS X. And as much as I would love to see Microsoft get nailed by another patent infringement case because of their history, we don't really know if this company has a leg to stand on. We just have to wait for the outcome of the case. For all we know the judge will look at it and throw it out. Remember, this is a America, we're innocent until proven guilty? Right?
        Even though I'm biased, I still try and look at things rationally.
        Axsimulate
        • Re; Innocent till proven guilty..q

          "Remember, this is a America, we're innocent until proven guilty? Right?"

          Well, in criminal court, yes.. Civil court, and especially the court of public opinion is a little less defendant-friendly.
          daftkey
          • @daftkey

            "Well, in criminal court, yes.. Civil court, and especially the court of public opinion is a little less defendant-friendly."

            Yeah, isn't that the truth. They don't call it a witch hunt for nothing!
            Axsimulate
  • RE: Microsoft headed back to East Texas to fight another patent infringement case

    VPNs, that's what this company is claiming??
    I don't know, but haven't VPNs been available
    since the mid 1990's? They just didn't come
    into "vogue" until more users had broadband
    access.
    BUT...this particular court is in Baja Oklahoma, so who knows!
    BTW---what are the implications for other companies that utilize VPN authentication and
    such without user cryptography? (Which just
    means you don't encrypt your password when you
    enter it, the software does) Can this nonsense
    be extended to other uses of encrypted authentication, not just for VPNs, but for example, SSL enabled transactions with online banks?
    Like other "IP patents", this looks more like just the "idea" not the implementation.
    <{;-)
    wizard57m-cnet
  • Outlook over Web?

    Maybe it's Outlook over https, which avoids the need to fire up a VPN to make Outlook connect to Exchange?
    mary.branscombe
  • Does IBM have the patent on patent trolling yet? nt

    nt
    storm14k
  • A barrel full of monkeys typing away to generate patents...

    Claim: use of random combinations of software code to generate patent mines, wherein, some combination of code can eventually be used as cause to sue for a googleplex of dollars.

    Detailed description:
    Pan troglodytes implemented in permutation device engineered to generate knowledge nodes connected by associative probability generation.

    Diagram: (See chimp attached to keyboard, attached to slot machine, attached to over-indebted newly minted patent intern.)

    Patent dispute by Bridge Troll, inc. upon Road Troll, LLC. Filed in ScienceIsBlasphemistan, incidentally famous for its 40 year iodine dietary deficiency scandal.
    voltrarian
  • Well, if MS insists on...

    playing this patent game, What's good for the goose...
    Dave32265
  • RE: Microsoft headed back to East Texas to fight another patent infringement case

    Microsoft is in the patent troll business too, so why can't other companies join in? MS has a record of using other peoples IP until they get caught, and this may be turn out to be another .
    ator1940