In 2004, Harold Milton Jr. and his attorneys Peter A. Hochstein and Jeffery Tenenbaum filed suit against the two companies, alleging that they violated a patent Milton filed called "Apparatus and method for electrically connecting remotely located video games" in 1994. Sony settled the suit out of court in 2009, but Microsoft kept fighting in court. U.S. District Court Judge Paul D. Borman ruled in favour of Microsoft, dismissing the case and ordering that Microsoft be recouped legal fees.
"The judge took issue with the patent's use of the term "electrical connection" -- Xbox Live does not use such a connection for communicating over the service, the court decided. "America's patent system is horribly broken, which has allowed a cottage industry to form for people who sue over any patent, no matter how broad or insignificant. The outright dismissal of this suit, with legal fees, should discourage others from abusing the system.