Microsoft pays $230 million to settle patent case

Microsoft has agreed to pay $230 million (US$200 million) to settle a patent dispute with network security developer VirnetX.

The deal will settle a pair of suits filed by VirnetX over Microsoft's use of virtual private network (VPN) components the company had patented. The company agreed to dismiss a pair of cases which had been filed in US district court.

Included in the settlement is a deal which will grant Microsoft a licence to use the VirnetX patents at the centre of the dispute.

One of the cases had already been settled by the district court in March. That decision awarded VirnetX a US$105.8 million penalty. Prior to reaching the settlement, Microsoft had said that it would be challenging the verdict.

In announcing the settlement, both companies said that they would continue to work together on security projects moving forward.

"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 VirnetX chief executive and chairman Kendall Larsen.