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Microsoft and Paltalk - self-described as "the leading real-time, video-based community" - have settled their patent dispute, with Microsoft entering into a licensing agreement with Paltalk for the patents in question.

Paltalk had filed suit against Microsoft in September 2006 for what it alleged were violations of a patent originally filed in 1996 and granted in 1998 to Mpath. That company morphed into HearMe, which soon went under.

In 2000, HearMe's technology was acquired by Paltalk, and the patent - refiled in substantially similar form - was regranted in 2001.

The lawsuit went to trial on March 10th of this year. In court, according to Edge magazine, PalTalk’s lawyer alleged that Microsoft's Halo franchise and Xbox consoles used the company's patented technology to support interactive gaming.

The suit requested $90m in damages. According to Microsoft, Paltalk had acquired the patents from MPath for less than $200,000. "[They] aren't worth much," Edge quoted Microsoft's lawyer as saying, “Certainly not $90 million."

Four days after the trial began, a settlement was reached. Today the terms of that settlement - Microsoft's licensing of the patents in question - was announced in a statement from Paltalk.

In a written sign of relief, the company's CEO Jason Katz noted that "After litigating with Microsoft for over two years to protect our intellectual property, it is gratifying to resolve this matter with Microsoft taking a license to Paltalk's patents."

Exactly where in the range of $200,000 to $90m those patents are worth to Paltalk is unknown, since financial terms of the settlement weren't made public. ®

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