It looks like the VHC vs. MFST saga has finally come to a close. VirnetX Holding Corporation and Microsoft Corporation today announced that they have settled the patent infringement cases brought by VirnetX before the U.S. District Court for the Eastern District of Texas. Pursuant to the settlement, both lawsuits will be dismissed.
As part of the settlement, Microsoft takes a license to the VirnetX patents for Microsoft's products and will make a one-time payment of $200 million to VirnetX. All other aspects of the settlement and license were not disclosed. A $200 million payment is a pretty penny for a company whose Market Cap is only $283M.
"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 Holding Corporation. "We look forward to our continued work with our Secure Domain Name Initiative partners in that effort."
Patent infringement is a constant battle waged by technology stocks and many times small cap tech stocks can benefit from the "big guys" slipping up. Another possible case of a settlement due to patent infringement is between Augme Technologies Inc (OTCBB: AUGT) and AOL. Originally AUGT had filed a suit against Tacoda Inc., shortly after this Tacoda was acquired by AOL. Now, being that Tacoda is fully operated by AOL, it should be fully responsible for the suit pending against Tacoda. Augme Technologies argues that AOL owned Tacoda during the time the infringement occurred and since Tacoda in and of itself has no assets to satisfy a judgment against it, AOL becomes the responsible party. This will require a bit more digging as information becomes available.
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