VirnetX is awarded $106 million in patent infringement suit against Microsoft
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A Texas jury awarded nearly $106 million to a California communications company after deciding that computer technology giant Microsoft Corp. had violated two of its patents.
VirnetX Holding Corp., based in Scotts Valley, originally asked for $242 million in damages. But the jury, in the U.S. District Court for the Eastern District of Texas, recommended on Tuesday that Microsoft pay $105.7 million.
The trial lasted for a week in Tyler, Texas, and dealt with Microsoft products including Windows Vista and XP. The award involves $71.7 million for one patent and $34 million for another, the company said.
The jury also found that the Redmond, Wash.-based software behemoth willfully infringed on the patents. The patents deal with methods of creating virtual private networks, or VPNs, between computers and for establishing VPNs using secure domain names.
VirnetX spokesman Greg Wood said company executives were “obviously just overjoyed.”
“Yesterday, the foundation of the tech world shifted,” he said. “We are sitting on a goldmine. We probably have the most important patent portfolio in history in regards to security, and yesterday was instrumental in validating that.”
The company’s stock jumped nearly 14%, up 77 cents to $6.36, Wednesday afternoon. The stock was not publicly traded on Tuesday.
Microsoft said it was disappointed by the verdict and planned to appeal.
“We respect others’ intellectual property, and we believe the evidence demonstrated that we do not infringe and the patents are invalid,’ said spokesman Kevin Kutz in a statement. “We believe the award of damages is legally and factually unsupported.”
-- Tiffany Hsu
