VirnetX (NYSE: VHC) And Mitel Networks Sign A Patent License Agreement

Shawshank, VA 7/12/12 (StreetBeat) -- VirnetX Holding Corp. (NYSE: VHC) and Mitel Networks Corporation (NASDAQ: MITL) (the "Parties") today announced that on July 11, 2012, they signed a Patent License Agreement (the "Agreement"). Under the terms of the Agreement, VirnetX has agreed to license certain of its patents to Mitel, for a one-time payment to VirnetX and an ongoing reasonable royalty for all future sales through the expiration of the licensed patents as outlined in the Agreement with respect to certain current and future IP-encrypted products.

Under the terms of the Agreement, the Parties have also agreed to dismiss the patent infringement case brought by VirnetX before the U.S. District Court for the Eastern District of Texas. All other aspects of the agreement were not disclosed.

"We are pleased to resolve this matter with VirnetX at this early juncture and on terms that we are happy with," said Steve Spooner, Chief Financial Officer of Mitel.

"We are pleased to have come to an agreement with Mitel on terms consistent with our VirnetX IP Licensing program," said Kendall Larsen, Chief Executive Officer and Chairman of VirnetX Inc.

About Mitel

Mitel (NASDAQ: MITL) is a global provider of business communications and collaboration software and services. Mitel's Freedom architecture provides the flexibility and simplicity organizations need to support today's dynamic work environment. Through a single cloud-ready software stream, Mitel delivers a powerful suite of advanced communications and collaboration capabilities that provides freedom from walled garden architectures and enables organizations to implement best-of-breed solutions on any network; extends the "in-office" experience anywhere, on any device; and offers choice of commercial options to fit business needs. For more information, visit: http://www.mitel.com

About VirnetX

VirnetX Holding Corporation is an Internet security software and technology company with patented technology for 4G LTE security. The Company's software and technology solutions, including its secure domain name registry and GABRIEL Connection Technology™, are designed to facilitate secure communications and to create a secure environment for real-time communication applications such as instant messaging, VoIP, smartphones, eReaders and video conferencing. The Company's patent portfolio includes 20 U.S. and 26 international patents and over 100 pending applications. For more information, please visit www.virnetx.com.

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VirnetX Holding Corp. (AMEX: VHC) Lands New Patent; New Lawsuit Revenues To Follow?

After celebrating a $200 million win against Microsoft in a patent infringement lawsuit earlier this year, VirnetX Holding Corporation has secured a new patent adding to its portfolio of secure communication network protocol technologies. It’s a unique revenue strategy for the Internet security and software technology company based in Scotts Valley, California: leverage the company’s early patents to bring lawsuits against cash-rich tech sector legends who’ve likely infringed.

VirnetX expects to stay engaged in commercializing its patent portfolio of over 48 U.S. and international patents and pending applications by developing a licensing program as well as developing software products. The products are designed to create a secure environment for real-time communication applications such as smart phones, instant messaging, VoIP, eReaders and video conferencing, which has recently been declared as essential for 4G security specifications.

The methods in the new patent, granted by the European Patent Office, are used to create a special kind of Virtual Private Network (VPN). This VPN not only includes the normal authentication and privacy, but also includes a stealth feature. This stealth feature is achieved by randomly changing the IP packet addresses on a packet-by-packet basis. Methods are described that enable the computers at each end of the VPN to use cryptographic techniques and synchronize the random address sequence. Third party observers cannot predict the sequence and the packets appear to be unrelated and not part of the same network connection.

What does that all mean? Really, really secure communications over the Internet. The patent was originally developed for protecting national security assets, but the company took a new direction during development by enabling sheer scale to protect valuable commercial assets as well.

In August, the company announced they would be filing additional lawsuits after posting $200 million in revenues for the second quarter of 2010, the result of a victorious judgment against Microsoft in the VirnetX patent infringement case settled this past summer. The company successfully proved Microsoft had implemented VirnetX’s technology in its Live Communicator products, despite Mircrosoft’s claim that the technology was obvious enough to software developers that there no need for a patent. The silver bullet was delivered when VirnetX’s lawyers revealed Microsoft had previously filed for the same patent with no approval.

Similar lawsuits have been brought on against Aastra USA, Inc., Aastra Technologies Ltd., Apple Inc., Cisco Systems, Inc., NEC Corporation, and the NEC Corporation. If the Microsoft case is any indication, VirnetX will continue to book award revenues in 2011.

Shares of the undisputed Internet security technology champ skyrocketed as high as $18.55 a share in October before deflating to today’s trading price of $13.44. Still, shares are trading up about 355% since we first reported on the VirnetX/Microsoft infringement case earlier this year.

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