Enterprise IT Watch Blog

May 19 2010   10:52AM GMT

Microsoft: 0, VirnetX and i4i: 490 Million

Melanie Yarbrough Profile: MelanieYarbrough

A modern day David and Goliath?

A modern-day David and Goliath?

Microsoft’s had a busy week so far, and it’s only Tuesday. A settlement was reached yesterday in the VirnetX patent suit, which began in February 2007.

The Facts: Infringed Patents

1. U.S. Patent No. 6,502,135: for “a method of transparently creating a VPN between client computer and target computer.” The jury granted VirnetX $71.75M.

2. U.S. Patent No. 7,188,180: for a “method for establishing a VPN using a secure domain name service.”The jury granted VirnetX $34M.

Microsoft has maintained that neither of these patents was infringed and further, that the patents themselves are invalid. Soon after the ruling was declared, VirnetX filed another suit against Microsoft citing the same patents were infringed, but by Windows 7 and Windows Server 2008 R2—released after the initial suit was drawn. (The original trial was aimed at Windows XP, Vista, and Microsoft’s Live Communication Server and Office Communication Server.) The settlement includes Microsoft’s licensing of the VirnetX technology, originally developed for the CIA, placing them in the company of major names that also use VirnetX such as Google, HP, AT&T and more.

VirnetX isn’t alone, either. Microsoft has been ordered to dish out a total of $490M, for VirnetX and another patent lawsuit—this one dealing with Word and Excel’s XML technology—from Toronto-based i4i. This one seems a little more personal; i4i’s chairman Louden Owen has claimed their win as “a war cry for talented inventors whose patents are infringed.” Though Microsoft continues to appeal the decision—and continues to be rejected—future versions of Word and Excel will be lacking the custom XML-based capabilities. Versions of Word distributed prior to January 11, 2010 are not affected; all other versions will have their custom XML tags removed. Microsoft’s Gray Knowlton suggests using Content Controls to reimplement any of your solutions that use Custom XML Tags.

Is this just another case of patent trolls—or more articulately, non-practicing entitiesfiling patents for future lawsuits such as these? It would appear not, depending on your opinion of the PTO, as Microsoft’s repeated attempts to discredit the patents they’re accused of violating have been thwarted by the U.S. patent office itself. From CampusTechnology: On Tuesday [May 11, 2010], i4i announced that the United States Patent and Trademark Office (PTO) had validated i4i’s patent on certain “custom XML” technology. This XML-based technology creates a metacode map to manipulate a document’s structure without reference to content. It allows a document such as a Word file to be converted to XML without loss of content.

Microsoft remains firm in its stance that the so-called custom XML technology is obscure and therefore fair game. Nevertheless, all versions of Word released after January 11, 2010 will strip documents of their custom XML upon opening (a build-upon of the patch for Word 2007 released earlier this year). Never fear: in April, i4i outlined how their x4w software will swoop in and save your custom XML tags. They’re hardly the heroes, however, adding an additional step and software to purchase for the end user.

Melanie Yarbrough is the assistant community editor at ITKnowledgeExchange.com. Follow her on Twitter or send her an email at Melanie@ITKnowledgeExchange.com.

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  • The IT Blog Top 10: May 27, 2010 - ITKE Community Blog
    [...] Microsoft: 0, VirnetX and i4i: 490 Million by Melanie Yarbrough for the Enterprise IT Watch [...]
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  • Breaking Up Is Hard to Do, Unless You’re Google - Enterprise IT Watch Blog
    [...] has taken a few hits lately—losing the most recent patent battles and being overshadowed by Apple as the most valuable technology company. With Microsoft’s [...]
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