SV tech company settles with Microsoft for $200 million

Computer giant Microsoft Corp. has agreed to pay $200 million to Scotts Valley technology company VirnetX Holding Corp. in a settlement outside of court.
VirnetX announced Monday, May 17, that it had settled with Microsoft after the local company filed two patent infringement lawsuits against the computer giant.
As part of the settlement, Microsoft takes a license to the VirnetX patents and will make a one-time payment to the company of $200 million.
In the suit, VirnetX claimed Microsoft had infringed on two patents by illegally using automatic virtual private network technology, often abbreviated VPN, in its products.
VirnetX, a 12-employee company on Scotts Valley Drive, declined to comment on the settlement at this time, but it made a prepared statement.
“This agreement highlights the need for VirnetX’s Secure Domain Name Initiative, and we believe that this successful resolution of our litigation with Microsoft will allow us to focus on the upcoming pilot system that will showcase VirnetX’s automatic Virtual Private Network technology,” said Kendall Larsen, chief executive officer and chairman of VirnetX, in the statement. “We look forward to our continued work with our Secure Domain Name Initiative partners in that effort.”
In mid-March, a Texas jury awarded VirnetX $106 million, although the company had asked for $242 million in damages.
VirnetX immediately filed a second suit, which prompted the $200 million settlement.
Microsoft also commented in a statement:
“We are pleased to work with VirnetX to bring these cases to a successful resolution through this settlement,” said Tom Burt, Microsoft corporate vice president. “We look forward to VirnetX’s continued progress as it develops its technologies.”