Ellen Rosen of Bloomberg Businessweek reported today that Microsoft paid $200 million to settle patent litigation brought by VirnetX Holdings Corporation in February 2007. VirnetX alleged that Microsoft infringed two VirnetX U.S. patents that covered the Virtual Private Network (VPN) technology contained in Microsoft Windows and Officer Server products.
IPVision Patent Map
The two U.S. patents asserted by VirnetX were U.S. 6,502,135 "Agile network protocol for secure communications with assured system availability" which has been cited by 85 other U.S. patents and U.S. 6,839,759 "Method for establishing secure communication link between computers of virtual private network without user entering any cryptographic information" which has been cited by 14 other U.S. patents. These patents are shown on this IPVision Patent Landscape Map (the top "fan" is the '759 patent). Note: Click on Patent Map Image to View an Interactive Patent Landscape Map.
Among the patents citing the VirnetX patents are 12 Microsoft, 11 IBM and 9 Cisco patents.
At the time the suit was filed VirnetX's stock price was under 50 cents per share. On May 17 VirnetX (Symbol: VHC) closed at $6.11 per share with a market capitalization of $267 million. VirnetX stock was a pure play on the Microsoft litigation. In the year ended December 31, 2009 VirnetX had revenues of only $26,000 and a net loss of over $13 million. This is VirnetX's stock chart since the filing of the suit against Microsoft:
VirnetX Holdings Corporation (VHC) Stock Chart
Author: Joseph G. Hadzima, Jr. | Senior Lecturer, MIT Sloan School of Management | President of IPVision, Inc.
