A federal judge in Michigan found in Microsoft's favor and dismissed a case brought by the holders of a patent on an "Apparatus and method for electrically connecting remotely located video games," including a mechanism for gamers to talk over telephone lines while playing the games. The case came down to definition of "electrically connected," with the judge finding that Microsoft's game console didn't violate the patent.
Sony was also named as plaintiff but previously settled the case.
The plaintiffs, including named inventors Peter Hochstein and Jeffrey Tenenbaum, filed notice that they plan to appeal the ruling to U.S. Court of Appeals for the Federal Circuit, according to the court docket.
More Info: Full Ruling (PDF)