Microsoft Settles InterTrust Patent Suit
The asset column of Microsoft's balance sheet is looking thinner these days. Roughly one week after a multi-million dollar payout to Sun Microsystems, Redmond has settled outstanding patent litigation with InterTrust Technologies. For a one-time payment of $440 million USD, Microsoft will gain access to InterTrust's patent portfolio.
InterTrust sued Microsoft on the eve of the 2001 launch of Windows XP, alleging that certain elements of the operating system violated its patents. Specifically, InterTrust cited Windows Media Players Digital Rights Management (DRM) technology and Windows product activation.
With the lawsuit out of the way, Microsoft is clear to continue its push into the entertainment industry. The company has positioned its Windows XP Media Center PCs as veritable hubs capable of streaming digital media throughout the home. Windows Media Center Extender plays content served up by Media Center PCs on set top boxes, TVs and Xbox game consoles.
Last month, Microsoft announced Portable Media Centers -- would-be "iPod killers" -- scheduled to arrive in Europe by year's end. The Portable Media Center is a handheld device that synchronizes with Windows Media Player, offering users music, video, support for still imagery and talking "photo story" slideshows. A good deal of the content available for the player will be right protected.
In a related development, Microsoft's digital rights management is being remade to accommodate customer subscriptions to MSN's forthcoming music store. New DRM tech called Janus is a secure clock technology that enables songs to be distributed under a subscription pricing model. Songs expire when customers' subscriptions lapse.
The settlement between Microsoft and InterTrust guarantees end-users the right to use Microsoft products and services that include DRM without having to obtain a separate license from InterTrust. Third party developers who work with Microsoft and Windows platform technology will not be required to hold an InterTrust license.
Commenting on the settlement, Marshall Phelps, deputy general counsel and corporate vice president of intellectual property at Microsoft, said in a statement, "Licensing InterTrust's patent portfolio reaffirms Microsoft's commitment to the importance of intellectual property rights as well as our commitment to our customers to stand behind our products in these emerging technology areas."