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Originally published Tuesday, March 16, 2010 at 10:00 PM

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VirnetX wins $106M verdict in Microsoft patent case

VirnetX Holding Corp. won a $105.8 million verdict against Microsoft Corp. in a lawsuit that accused the world's biggest software ...

Bloomberg News

VirnetX Holding won a $105.8 million verdict against Microsoft in a lawsuit that accused the world's biggest software maker of infringing two patents on a way to communicate securely over the Web.

Jurors in Tyler, Texas, found Tuesday that the infringement is willful, which means the judge could as much as triple the jury award.

Scotts Valley, Calif.-based VirnetX, which sued in 2007, sought $242 million and plans to ask the judge for an order blocking Microsoft's further use of the inventions.

The patents relate to use of a domain-name service to set up so-called virtual private networks, through which a Web-site owner can interact securely with a customer or an employee can work at home and access a company's files. They originated with defense contractor SAIC and stemmed from work performed for the Central Intelligence Agency to develop secure communications, VirnetX said.

SAIC transferred the patents to VirnetX in 2006 in return for a pledge of a share of any royalties, according to VirnetX's 2008 annual report.

Microsoft said it will challenge the jury's decision. "We respect others' intellectual property, and we believe the evidence demonstrated that we do not infringe and the patents are invalid," spokesman Kevin Kutz said in an e-mailed statement.

Microsoft lawyer Matt Powers told the jury SAIC tried to license the patents first to various companies and that no one was interested because the inventions didn't work.

He said other researchers, including ones at Microsoft, were able to come up with their own, successful way of making secure connections before SAIC.

Powers also challenged the amount VirnetX sought, saying the patents were worth, at most, $15 million.

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