Patent Law

The following is from a July 31, 2009 VirnetX press release available at PR Newswire:

VirnetX Holding Corporation (NYSE Amex: VHC) announced today that the United States District Court for the Eastern District of Texas, Tyler Division, issued its patent claim construction, or "Markman" Order ("Markman Order") in the ongoing patent infringement action between VirnetX Inc. ("VirnetX") and Microsoft Corporation ("Microsoft").

In a Markman ruling, a district court hearing a patent infringement case interprets and rules on the scope and meaning of disputed patent claim language regarding the patents in suit. A Markman decision is often a significant factor in the progress and outcome of patent infringement litigation.

In the recently issued Markman Order, the Court adopted interpretations that VirnetX believes are favorable to VirnetX on many of the claim terms that were in dispute in the litigation.

The litigation, which the company previously announced it had filed in February, 2007, involves Microsoft's development and marketing of certain of its products that the company believes infringe three patents owned by VirnetX.

"We are extremely pleased with the Court's Markman Order. We remain confident in our position concerning Microsoft's infringement of the patents at issue," said Kendall Larsen, VirnetX's chairman, president and CEO. "While the outcome of this and any legal matter is unpredictable, we believe the Court's Markman Order is another significant step towards the successful resolution of this litigation and further validates VirnetX's ongoing commitment to the enforcement of our intellectual property and protection of our investment in patent-protected licensing and research and development."

About VirnetX

VirnetX Holding Corporation, a secure real-time communications and collaboration technology company, is engaged in commercializing its patent portfolio by developing a licensing program, as well as developing software products designed to create a secure environment for real-time communications such as instant messaging and Voice over Internet Protocol. The Company's patent portfolio includes over 25 U.S. and foreign patents and pending applications which specifically cover the Company's unique GABRIEL Connection Technology. For more information, please visit www.virnetx.com