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"The tab for that suit was a cool $200 million"

posted on Jun 07, 2010 06:38PM

Microsoft Settles Patent Row with BackWeb

June 4, 2010
By

Stuart J. Johnston

Israel-based BackWeb Technologies announced Thursday that it has settled its patent dispute with Microsoft, the third patent suit that the software giant has quietly settled over the past month.

Tiny BackWeb, which develops communications solutions for enterprises, sued Microsoft (NASDAQ: MSFT) in March of last year regarding the larger firm's infringement of four patents belonging to it. The company's suit claimed that Microsoft infringed the patents in its automatic update technologies.

"We are pleased to have the litigation resolved," Bill Heye, BackWeb's president and CEO, said in a statement.

Microsoft has now legally licensed the patents in question and BackWeb has dropped its suit, which had been filed in U.S. District Court for the Northern District of California in San Francisco, the statement said. BackWeb's U.S. headquarters is in San Jose.

BackWeb's patents cover performing file transfers in the background between a user's PC and a server or between two PCs. They also support prioritizing simultaneous file transfers.

The smaller firm had argued that Microsoft's Background Intelligent Transfer Service (BITS), as well as Windows Update and other automatic update technologies infringed BackWeb's patents, one dating back to 1999. In its initial complaint, BackWeb claimed that BITS debuted in 2001.

Terms of the deal were not disclosed. However, BackWeb said in its statement that $10 million in cash that the Israeli firm has in the bank "reflects the impact of the patent litigation and the last year of BackWeb's business operations."

Two weeks ago, Microsoft settled two other patent infringement suits -- one it had lost in lower court and the other just filed -- with VirnetX regarding the larger company's infringement of patents for virtual private networking (VPN) technologies used in Windows and several server products. The tab for that suit was a cool $200 million, however.