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Microsoft Faces $90 Million Lawsuit Over Online Gaming

Online chat company PalTalk Holdings is suing Microsoft for $90 million, alleging that Xbox Live infringes on two of the firm’s patents relating to dial-up technology.
Online chat company PalTalk Holdings has begun a $90 million lawsuit against Microsoft, alleging that the company’s Xbox products infringe two of the firm’s patents. The New York based company, which claims over 4 million users worldwide, alleges that Microsoft’s Halo and the Xbox console itself infringe the patents. The patents relate to "controlling interactive applications over multiple computers" and were originally registered by MPath Interactive. MPath is best known for the MPlayer PC gaming service, which was later sold to GameSpy. MPath was also responsible for VoIP (voice over internet protocol) and video conferencing service HearMe, which PalTalk still operates. PalTalk lawyer Max Tribble described MPath as "a pioneer in the online video industry in the area of real-time, multiplayer online games," according to Bloomberg. "Microsoft had many meetings with MPath regarding their technology, and Microsoft found the technology to be very valuable," said Tribble. Microsoft lawyer David Pritikin claims that although the company did review the MPath technology, it chose not to use it. Pritkin also claims the patents were obtained for less than $200,000, refer only to dial-up communication and "don’t cover the way the Halo games work." According to the Washington State Patent Law Blog, Judge David Folsom of the U.S. has denied Microsoft’s motion for a partial summary judgment, stating that the company "has not met its burden of showing that the two patents were anticipated by clear and convincing evidence."

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