Item 8.01. Other Events.

Vertical Computer Systems, Inc. (the “Company”) has settled the patent infringement claim that the Company initiated in federal court against Microsoft Corporation. This matter has previously been disclosed under the heading “Legal Proceedings” in the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007.

Pursuant to the confidential settlement agreement, the Company has granted to Microsoft a non-exclusive, fully paid-up license under the patent which was the subject of the legal proceeding.

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Vertical Computer
Systems, Inc.
 
 
(Registrant)
 
 
 
Date: August 1, 2008
By:
/s/ Richard Wade
 
 
 
Richard Wade, President &
 
 
Chief Executive Officer