VirnetX Wins a $105.8 Million Patent Suit Against Microsoft

Posted Mar 17th 2010 4:00PM by Tom Taulli
Filed under: Microsoft (MSFT)

VirnetX (VHC) focuses on commercializing its patent portfolio for real-time communications over the Net. The company is fairly small, with a mere $20,672 in revenues in the latest quarter. There are only 12 employees.

But the company scored a big win this week: a Texas jury awarded the company $105.8 million in a patent infringement suit against Microsoft (MSFT). In fact, the damages may be doubled because the actions were deemed "willful." And, if this judgment withstands the inevitable appeals, then there could be substantial licensing fees from other tech companies.

Back in 2006, VirnetX obtained various patents from SAIC (SAI), which is a top technology development company. Actually, the company arranged a deal to get a piece of any future licensing revenues.

Of course, Microsoft is going to fight back hard -- and it certainly has lots of experience in handling these matters. For example, last year the company lost a $290 million patent infringement case against i4i Inc. regarding technologies for Microsoft Word.

So far in today's trading, VirnetX's shares are up 13% to $6.33.

Tom Taulli advises on business tax preparation and is also the author of a variety of books, including The Complete M&A Handbook. His website is at Taulli.com.

Tags: inthenews, msft, vhc, VirnetX