According to TecSec's complaint:

Essentially, Microsoft now argued that its previous representations that it had not entered the Reserved Scenario and was not performing sub-file encryption as of the Effective Date were false; it had entered the Reserved Scenario and did perform sub-file encryption prior to March 29, 2004 (the "Effective Date"). Consequently, argued Microsoft, .NET 2.0 was unknowingly licensed by Plaintiff in the Patent License Agreement.

In fact, the reason Microsoft and TecSec had agreed to a Reserved Scenario was because Microsoft had expressly represented that it was not practicing the encryption technology encompassed within the Reserved Scenario, and was not performing sub-file encryption as of the Effective Date. Without this express representation, TecSec would not have entered into the Patent License Agreement or would have required a much higher license fee from Microsoft.

Microsoft has never attempted to reconcile with TecSec these two contrary representations to TecSec: (1) the March 2004 representation that as of the Effective Date of the Patent License Agreement, Microsoft did not have a product that performed sub-file encryption or was in the Reserved Scenario; and (2) the March 17, 2005 representation that as of the Effective Date, .NET 2.0, which includes sub-file encryption, was a Technology in Existence.

After TecSec notified Microsoft in July 2004 that it had learned of Microsoft's plan to enter the Reserved Scenario, Microsoft rejected all efforts by TecSec to negotiate additional license fees. TecSec sought to learn facts pertinent to license fees due and payable by Microsoft, leading a dialogue through 2005. Despite TecSec's diligent efforts, in response to TecSec's investigation, Microsoft actively concealed the scope of its infringement and offered inconsistent explanations and interpretations of its own representations and the terms of the Patent License Agreement, thereby obstructing the filing of the present action. Throughout this process, Microsoft has failed to negotiate in good faith with TecSec, and has failed to demonstrate fair dealing with TecSec.

TecSec is now seeking injunctive relief, damages, and prejudgment interest for Microsoft's past infringement. TecSec further argues that this "is an exceptional case, and TecSec is entitled to damages, enhanced damages, attorneys' fees, costs and expenses."

Nothing exceptional here. This is business as usual for Microsoft.