Federal Judge Paul D. Borman sits in Seattle and has sided with Microsoft in 1994 patent infringement case brought against the company by three chaps called Harold Milton Jr, Peter A. Hochstein and Jeffrey Tenenbaum that could have impated Xbox Live.According to
Bloomberg, "The patent, issued in 1994, is for a device that lets two or more people play video games together without being in the same location, such as over a telephone line. The men claimed that could be construed to cover all systems that can have multiple players, like the Xbox."
The judge ruled that the patent claim did not stand up in the case of Live as it only extended to "game systems that are electrically connected".
The same patent claim was thrown at Sony for PSN. The Japanese company settled out of court in April of 2009.