VirnetX Holding Soon to Be Holding $105.75 Million of Microsoft’s Money

VirnetX Holding Corporation, a company Microsoft claims was established solely to sue it for millions, has succeeded in doing just that. A Texas court on Tuesday ordered Microsoft to pay $105.75 million to VirnetX for violating two patents related to secure virtual private network technology–No. 6,502,135 and No. 7,188,180.

That’s not the $242 million VirnetX sought when it first sued in 2007, but it’s a substantial sum–and it could increase. If Microsoft’s infringement is found to be willful, the damage award could be tripled.

Microsoft (MSFT), which views VirnetX’s patents as dross and the company itself as a patent troll, said it will challenge the court’s decision. “We respect others’ intellectual property, and we believe the evidence demonstrated that we do not infringe and the patents are invalid,” Microsoft spokesman Kevin Kutz said in a statement. “We believe the award of damages is legally and factually unsupported, so we will ask the court to overturn the verdict.”

And the industry will no doubt be rooting for the software giant to succeed. Because if Microsoft is vulnerable to an action like this, then presumably, other companies using VPN technology are as well.

“Any time you can successfully enforce a patent against a behemoth like Microsoft, it opens the door for more lawsuits,” patent attorney Cole Stuart told Nick Eaton at the Seattle Post Intelligencer, which has been doing a great job covering the case. “It’s called ‘rolling up the industry.’ If it’s a technology Microsoft uses, it’s likely other companies use it.”