Microsoft Loses Yet Another Patent Lawsuit

from the how's-that-looking-now? dept

In the last few years, Microsoft has become a bigger and bigger supporter of patents, which is a bit ironic, given that Bill Gates once pointed out that the software industry never would have developed if there had been software patents back in the early days. But, proving that new companies innovate, while older companies litigate, Microsoft has become a big patent hoarder in recent years. But, to date, while it’s used those patents to threaten lots of companies, it seems like Microsoft’s decision to live by patents, is actually costing it quite a bit of money.

We’ve already covered Microsoft’s big loss to i4i at the end of last year, for which Microsoft was told to pay nearly $300 million. And, now, Microsoft has lost a patent lawsuit in East Texas (of course) from a company that appears to have been set up just to sue Microsoft — claiming patents over VPN technology. In fact, the company’s business plan basically admits that its business model is to win these sorts of lawsuits. Hard to see how that’s promoting progress or innovation in any way. Oh well. Live by the patent, die by the patent, I guess…

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Companies: microsoft, virnetx

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Comments on “Microsoft Loses Yet Another Patent Lawsuit”

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Anonymous Coward says:

Re: Re:

Patents! Are not only more important than progress, their how progress is measured. More patents mean more progress. Just look at history. We have more patents now than we did last year and we have advanced since last year! Tomorrow the USPTO will grant us some more progress and so on. Every time something new comes out, it’s because of patents. If we did away with idea patents, we would be hunting Mastodons within a month! (well… depending on how fast they destroy them)


Josef Anvil (profile) says:

Re: Re: Re:WTF ?!?!

Your comment sounds like something that came up after a few hours of hitting the bong. So either it was really good sarcasm and I almost missed it OR you actually believe more patents equal more progress.

I agree that patents on inventions are a great idea. Patents on ideas are just stupid. If I can imagine something but have no way to implement it, then why should I deserve compensation?

Your argument points us to history and then you say every time that something new comes out, it’s because of patents. Logically that would mean that prior to patents in history there were no inventions and nothing new. And then you end it with IT’S A PROVEN FACT!!!

Put the bong down, and go back to the history books. Better yet, try a dictionary and look up the words “proven” and “fact”.

Anonymous Coward says:

once upon a time..

I considered a similar business model. One where I would use the ludicrous patent system in Robin Hood fashion. Since the government only listens to corporate America, It would produce incentive for then to unleash their lobbyists.

The only reason we never did, was because I was *sure* that they would fix the system before the backlog at the USPTO would clear up.. that was in 99. If someone started using patents as a strategic vehicle, in order to exploit those that abuse the patents. How long do you think it would take for Congress to pass a law fixing THAT part of the broken system?

As long as they go after MS and their ilk.. I say good on them. There doing more for patent reform than anyone could at this point in the evolution of our Corpocracy.

Ronald J Riley (profile) says:

Corporate Adolescents

Mike Masnick,

You must be using eyeglasses made from the bottoms of recycled old style eight ounce Coke bottles when looking at patent issues because that is the only way you could have such a distorted view.

Most certainly Microsoft was built based on the kind of innovation which you rant about all the time where they took others’ inventions. DR dos comes to mind as one notable example of this. And it is true that Microsoft waved their magic wand and produced a bunch of minor incremental inventions which is typical of companies which are unable to produce significant inventions.

It is also true that Microsoft has been wounded by numerous small companies who had important technology and that they have repeatedly been caught with their sticky fingers in others patent cookie jars.

Microsoft reminds me a a young punk with an entitlement mentality who has repeatedly received attitude adjustments. They are slowly growing up, maturing a bit at a time. They went from trying to take whatever they wanted to at least making an effort at producing the inventions they need. Since Microsoft is not capable of producing the most important inventions the next step is for Microsoft to start buying rights before use. There is hope that they are slowly, granted very slowly learning that they must start acting like responsible corporate citizens.

In the meantime they will continue to start scraps and get the crap kicked out of them as will every other thief of patents property rights big and small 🙂

By the way, I have an interesting political tidbit for you to chew on. I hear that Microsoft’s relationship with the Coalition for Patent Piracy & Fairness is strained and that they may withdraw from the Piracy & Fairness Coalition. I also hear that Apple’s work to weaken patents is about to bite then really bad because they have probably weakened their own patent rights while trying to facilitate their appropriation of others rights. Think about this and consider the implication for America’s competitiveness. Be sure to remove those glasses first and bear in mind that reality altering drugs should not be used when attempting to get an analytical picture of things.

Ronald J. Riley,

I am speaking only on my own behalf.
President – – RJR at
Executive Director – – RJR at
Senior Fellow –
President – Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (810) 597-0194 / (202) 318-1595 – 9 am to 8 pm EST.

Anonymous Coward says:

Re: Corporate Adolescents

Have you updated your wbesite yet or is it still completely obsolete?

“PIA helped short-circuit HR 2795 the deadly Patent “Deform” (Reform) act of 2005 (109th Congress). The Anti- American innovation evil doers are still plotting to bring new anti-innovation legislation in the new Congress in 2007 (110th Congress) by way of House Bill HR 1908 and Senate Bill S 1145. “

Sorry buddy, it’s 2010. You can’t even update a website yet alone innovate.

Anonymous Coward says:

Re: Corporate Adolescents

“DR dos comes to mind as one notable example of this.”

Please enlighten us as what M$ has to do with Dr Dos. Sure Dr-Dos was caught infringing on freeDos, but Microsoft was not a party to that, that I can find.

nonetheless, your website and case examples do suggest you are stuck in 2005.

Anonymous Coward says:

The way you’ve written this post makes it sound like M$ went after a company for infringing. This was not the case. In this case, a small company went after M$ for some stupid patent that shouldn’t have been granted in the first place and some how won.

Much like with the i4i case, the problem is with people who see a giant like M$ and see easy money.

So really, even though M$ is hording patents, they aren’t in litigation mode yet as they aren’t the ones suing.

Anonymous Coward says:

Re: Re:

To the extent that MS collects patents to prevent themselves from being sued by the patents they collect, I don’t blame them. They don’t want someone else to get a patent and sue them, they would rather get the patent first before someone else gets it and sues them with it. Since our first to invent system is really a first to file system in disguise, and the cost of a lawsuit makes whoever came up with the invention first irrelevant (since parties tend to settle anyways), I suppose that collecting patents as a defensive measure makes sense.

DerekCurrie (profile) says:


“… the company’s business plan basically admits that its business model is to win these sorts of lawsuits.”

If this is the case, AND they admitted it, Microsoft have a terrific incentive to appeal the decision. Submarine patent lawsuits are illegal in the USA, and this appears to be a clear case of submarining. Of course law versus reality is another matter. Submarining lives on. It is the worst of patent abuse, a plague that doesn’t discriminate between types of patents. The perpetrators couldn’t care less about the software patent crisis.

Gene Cavanaugh (profile) says:


As a patent attorney – GOOD ARTICLE, and I agree with you wholeheartedly!
Where a small entity is using patents to get financing for their startup, and have to prove that someone else will not simply use a superior financial position to steal their innovation (like Carnegie did in steel – though, since Carnegie then used the technology to improve the economy rather than simply collect extorted funds, that may not be a good example – but he then used his power to prevent any more innovation and protect his dominance, so maybe it is a good example!), IP (including patents) is a good thing; where it merely legalizes what should be criminal behavior, it is horrible.

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