Microsoft Settles $200 Million VPN Patent Case

Microsoft will pay the VirnetX Holding Corp. $200 million in a lump sum to settle a patent infringement case that was brought by VirnetX, which had claimed Microsoft was infringing on two of its patents on automatic and secure virtual private network (VPN) technology.

An announcement Monday by both firms said “all other aspects of the settlement and license were not disclosed.” Previously, Microsoft had lost a jury trial in the case.

The settlement could have ramifications for other high tech firms. VirnetX is an Internet security software company whose patent portfolio was developed for work carried out for the Central Intelligence Agency. VPN technology is utilized by several large US high tech firms including Cisco, Google, HP, AT&T, and Verizon among others.

“This agreement highlights the need for VirnetX’s Secure Domain Name Initiative,” said Kendall Larsen, chief executive officer and chairman of VirnetX in a statement. “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. We look forward to our continued work with our Secure Domain Name Initiative partners in that effort”.

VirnetX was founded by developers and inventors from Science Applications International Corp after they sought to market SAIC patents.

The settlement calls for Microsoft to take a license to the VirnetX patents for Microsoft’s products.