PalTalk Holdings is seeking $90 million in damages from Microsoft over patent infringement dealing with a dial-up method of computer to computer communication created by MPath Interactive. Both Microsoft and PalTalk have an investment in the project and reasons for the lawsuit. This seems like a complicated case where both parties are at fault.
On the Microsoft side, Xbox live is one of their biggest advantages and Halo has done more than its fair share of carrying the system. If there was one thing that is continually ranked higher than the competition, it is Microsoft's Xbox Live and online capabilities, expecially noted in the Halo games. Microsoft has a large interest in keeping the capabilities. Microsoft had talked to MPath when they were developing online multiplayer, so that is a key argument for the Mpath.
For PalTalk, Microsoft doesn't deny the meeting the two companies had, but Microsoft is arguing that Halo uses a similar, but still different, way of setting up the Multiplayer games. Additionally, the patents in discussion had been sold to PalTalk Holdings for $200,000. This sheds light on the fact the patents aren't worth $90 million and PalTalk is gouging Microsoft because of the success of Halo.
Whether Microsoft or Paltalk is correct is unknown. However, Microsoft was aware of how the Mpath systems worked and if they copied any parts of it they do owe it to the companies to adequately compensate them. At the same time, I think PalTalk should expect a reasonable compensation and not take advantage of another companies successes. Only a jury of their peers can now decide who was right and who was wrong, though I doubt the actual truth is as black and white as the courts will require.
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