Microsoft Corp (MSFT – Analyst Report) recently sued Acacia Research Corp, claiming a breach of contract pertaining to smartphone technologies. The lawsuit has been filed under seal in Manhattan.

Microsoft accused Acacia of claiming payments based on litigation tactics instead of demanding payments based on the actual valuation of its patents. The lawsuit has been filed by Microsoft following the seven patent infringement lawsuits that Acacia filed against Microsoft in October.

Acacia purchases patents for the collection of royalties related to them or for taking legal action against the perceived infringers of this intellectual property. In 2007, Acacia had sued companies such as Oracle, Corel, Kodak, Nuance, Borland, Novell and others on grounds of patent infringement.

However, Acacia never sues a company in its own name, on the contrary it makes good use of its subsidiaries in this regard. In this case too, the same tactic was adopted by Acacia while filing lawsuits against Microsoft. One of the lawsuits that Acacia recently filed against Microsoft was by Intercarrier Communications, which happens to be an Acacia subsidiary, keeping its image clean at the same time.

Microsoft and Acacia have entered into agreements in the past too. In 2010, they entered into a definitive agreement over patents for smartphone technology and in 2011 struck a deal related to e-mail messaging.

Microsoft Corporation develops, manufactures, licenses, sells and supports software products. The company operates in five segments: Windows & Windows Live Division, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices Division. Microsoft reported revenues of $18.53 billion in the fiscal first quarter of 2014.

Currently, Microsoft has a Zacks Rank #3 (Hold). However, Infoblox Inc (BLOX –Snapshot Report) with a Zacks Rank #1 (Strong Buy), Microchip Technology Inc (MCHP – Analyst Report) and Facebook Inc (FB – Analyst Report), both with a Zacks Rank #2 (Buy) are more attractive investment options currently.