Troll’s last payday? Microsoft pays VirnetX $23M to end patent case

Patent-holding company's biggest win, against Apple, was tossed out in September.

VirnetX is a patent-holding company that won $200 million from Microsoft following a 2010 trial and then sued Microsoft again in 2013. The second lawsuit (PDF) asserted six patents that were said to cover Skype and other Microsoft products that integrated Skype.

Now that second case has been laid to rest as well, with Microsoft agreeing to pay a $23 million settlement. "We are pleased to have come to an agreement with Microsoft Corporation and put all our legal disputes behind us," VirnetX CEO Kendall Larsen said in a statement on the deal. A Microsoft spokesperson said the company was pleased with the settlement and noted that it includes a license to VirnetX's entire patent portfolio.

The $23 million settlement is more than ten times what VirnetX made from all its licensing activity in 2013, Bloomberg noted in its brief on the settlement.

VirnetX has been referred to as a "patent troll," since it makes all its money from licensing and litigating patents. The publicly traded company has 14 employees, and its corporate headquarters is a small office suite in Zephyr Cove, Nevada, which it leases for $5 per month.

There aren't any other big payments on the horizon for VirnetX. The company's stock got a bump from the Microsoft settlement, but its biggest win, a $368 million verdict against Apple, got thrown out by an appeals court in September. Its stock price hovers around $6 per share, far off the $20 mark it sat at one year ago.

The patents in the Apple lawsuit are still valid, and some are still considered infringed: that case has been sent back to the lower court to re-assess a damage award. The judge in that case had also awarded VirnetX an ongoing royalty that would have amounted to nearly 1 percent of all iPhone sales.