SalesForce.com Sued, VirnetX Settles

Salesforce.com, which sells Web-based customer relationship management (CRM) and other business management services, has been sued by Microsoft for infringing several of its patents. The lawsuit follows a breakdown in talks, says Microsoft, and is an unusual step: Microsoft has reached more than 600 licensing agreements for its intellectual property (IP) since 2003, but has resorted to litigation only a handful of times. Separately, Microsoft paid VirnetX US$200 million to settle two patent-infringement lawsuits and license VirnetX patents related to virtual private networking (VPN).

Filing Against Salesforce.com Names Nine Patents

In May 2010, Microsoft filed a patent-infringement case against Salesforce.com in the United States District Court for Western Washington, alleging that Salesforce has infringed on nine Microsoft patents. Microsoft claims that it first approached Salesforce about licensing the patents more than a year ago, and the filing seeks a jury trial, as well as treble damages for deliberate infringement. Salesforce is often cited as a leader in software as a service (SaaS), which poses a challenge to Microsoft’s traditional business of selling software that runs on PCs and servers owned by customers. Microsoft’s Dynamics CRM server software and CRM Live service compete against Salesforce’s offerings.