New York based PalTalk Holdings filed suit against Microsoft over two years ago, claiming that the company violated two patents with its Xbox Live service, singling out the multiplayer infrastructure of its Halo games.

PalTalk wants $90 million from Microsoft, a case which went to trial in Texas this week, according to a report from Bloomberg. Lawyers have begun making their respective "Nuh-uh" and "Yuh-huh" cases.

According to PalTalk, which purchased the two patents under contention from company MPath Interactive Inc., Microsoft had met with the patent holders to evaluate their technology. Microsoft doesn't refute that claim, but said it decided to pursue other multiplayer technology solutions for Live, working with another party.

Microsoft asserts that PalTalk is overvaluing the patent's worth—which were purchased for $200,000—and that the the publisher's decision to seek alternative tech was "upsetting to PalTalk and its employees."


We're sure they'll work it out and your Halo 3 multiplayer sessions will never know the difference.

$90 million sought from Microsoft [Bloomberg/Seattle PI]