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InterTrust Says It Owns DRM, Sues Microsoft
Rinisari writes "Fortune.com has a story about Santa Clara-based InterTrust Technologies is claiming that their suite of 26 issued patents and 85 pending patents covers digital rights management technology currently in use by Microsoft. InterTrust is seeking an injunction barring distribution of about 85% of Microsoft's product line, including WindowsXP, OfficeXP, and Xbox. Slashdot previously mentioned InterTrust when Sony and Philips announced they were attempting to buy ( and still are attempting to buy) the DRM outfit."
Microsoft because of stupid patents,
or
Intertrust for stupid DRM?
People claiming that someone copied DRM.
You know, I was gonna post this yesterday until I saw this.
-- derby
Can Victor Shear Bring Down Microsoft?
.NET. Understand what that means: InterTrust is seeking an injunction barring distribution of about 85% of Microsoft's product line. (Though the DRM and trusted systems technologies form only a piece of each product, they have been, in Microsoft's trademark fashion, tightly integrated into these larger programs.) InterTrust seeks damages too--which could be trebled if Microsoft were shown to have acted willfully. Polaroid's spectacular 1976 patent suit against Kodak--which eventually forced Kodak to scrap its $2 billion foray into instant photography and pay $900 million in damages--is dwarfed by the scope of the InterTrust-Microsoft litigation.
... more widely available on a fair and reasonable basis."
.NET initiative, with its focus on networked computing. InterTrust executives watched in horror as Microsoft began introducing DRM and trust features on nearly all its products.
Maybe not. But his company's patent suit is the biggest legal threat to Microsoft since the antitrust case.
FORTUNE
Tuesday, December 17, 2002
By Roger Parloff
Imagine you had a nickel for every compact disc that's ever been made. The patent holders of the CD technology do have nearly all those nickels. Sony Corp. of America and Royal Philips Electronics get 3 cents for every CD manufactured, plus 3% of the price of every CD player sold.
That's a pretty good revenue stream--several hundred million dollars annually--as is the one that flows to the ten companies that hold the key patents on the DVD. Even the subversive, intangible MP3--that symbol of piracy triumphant--generates money for its patent holders; Thomson Multimedia and the Fraunhofer Institute of Erlangen, Germany, split 75 cents per MP3 player and $3.50 to $5.00 per ripping device.
Now there's a new set of technologies whose royalty stream may eventually swamp those of all its forebears: the so-called trusted systems and digital rights management (DRM) technologies that enable secure transmission of valuable files--audio, video, or text--across digital networks. Thanks to Napster and its ilk, the recording industry and Hollywood have endured a crash course in the importance of DRM. But DRM's potential applications extend far beyond consumer media. Such technologies may eventually be crucial, for instance, to the financial services industry, the health-care sector, law firms, and come to think of it, any company that wants to be able to send proprietary or confidential information over digital networks without worrying that it will wind up posted on YourCompanySucks.com.
Now imagine that one company holds the key patents to the whole shebang--not just methods to secure music and movies, but the entire spectrum of digital commerce. Imagine that revenue stream.
A small Santa Clara, Calif., company called InterTrust Technologies maintains that it is, in fact, that company. Though there are those who dispute this claim, InterTrust has some awfully big players convinced, including consumer electronics giants Sony and Philips. Indeed, in November, the two companies offered to buy InterTrust for $453 million in cash; as FORTUNE goes to press, they are in the process of trying to close the acquisition.
In its current incarnation, InterTrust consists of 39 employees and a patent portfolio: 26 issued patents and about 85 more pending, all in the fields of DRM and trusted systems. InterTrust also has one other asset of note: a suit against Microsoft that appears to be the highest-stakes patent litigation in history. The suit's charges give a good feel for the scope and breadth of InterTrust's patents, at least as InterTrust sees it. The company says its patents are being infringed every time Microsoft ships its Windows XP operating system; Office XP suite; Word 2002 word processor; Excel 2002 spreadsheet; Outlook 2002 e-mail client; PowerPoint 2002 slide presentation software; Windows Media Player; Xbox videogame console; Microsoft software for servers, mobile phones, pocket computers, and consumer electronics devices; and many of the components and tool kits that Microsoft now markets in connection with its most cutting-edge "bet the company" initiative: the networked computing and web-services platform known as
Since the acquisition is pending, neither Sony nor Philips will comment on the suit. Their only officially disclosed plan, expressed in a Nov. 13 press release, is to make "InterTrust's important DRM patents
But many observers think the consumer electronics giants are purchasing more than just a potential revenue stream. Rather, the companies may be acquiring what the feds failed to get via their sputtering antitrust suit: a Microsoft containment strategy. Microsoft's critics complain that the company is now leveraging its monopoly PC operating system to gain an advantage in the software markets for servers, set-top boxes, mobile phones, handheld devices, and consumer electronics devices--all of which are becoming more "intelligent," linked, and convergent with computers. InterTrust's patent portfolio may give Sony and Philips the hammer they need to beat back Microsoft. "I'd look to see a trade," says one security solutions vendor. "It could be as simple as 'Microsoft, you stay out of consumer electronics. You can have the PC.' That scale of trade."
InterTrust is the brainchild of a mad-scientist type named Victor Shear, who founded the company and is still its chairman. The son of a renowned cancer researcher, Shear, 55, aspired to achievements that not only would be personally remunerative but would also advance civilization. "Victor grew up in an environment," says one InterTrust executive, "where you don't come home unless you've put a satellite in orbit or something." (Citing legal advice prompted by the pending acquisition, Shear declined to be interviewed.)
"Victor Shear is without question the most fascinating man I've ever met in my life," says one dissatisfied yet mesmerized customer of a software product InterTrust marketed in the mid-1990s. "He's passionate, knowledgeable, and incredibly determined," the customer continues. "Those were his best and worst qualities."
Equipped with only a BA in sociology, Shear is almost entirely self-taught in the realm of technology. In 1990, when commerce over the Internet was still illegal--the National Science Foundation lifted the ban the following year--Shear founded InterTrust with the extravagant aim of inventing core technologies that would enable "technology-mediated commerce," as he put it. He envisioned a world in which most commercial transactions would be conducted electronically between a wide variety of hardware and software devices that would interact, for instance, via telephone modem connections to proprietary servers (which were already common) and perhaps eventually the Internet. These hardware devices and the software within them would all require ways of assuring themselves that they could "trust" one another to handle valuable digital property in accordance with predictable rules.
The key problem was how to provide persistent protection to digital files. If Jack wanted to send Jill a privileged legal document or a copyrighted movie, encryption would protect the file from being intercepted and read en route. But it did nothing to stop Jill, once she had the file, from making a million perfect digital copies of it and distributing them all over the globe. To prevent that one had to wrap the file in a secure digital container and tag it with rules describing how it could be used, such as: You may open this file only if you show proper authorization, or pay $1.99 to a clearinghouse; You may open this file X number of times or for Y number of days; and so on. To play or read the encrypted file, recipients would need special software or hardware that could be trusted by the content originator to enforce the rules. (Xerox's Palo Alto Research Center and IBM were developing similar schemes at the same time.)
Shear believed DRM would empower both producers and consumers by unleashing an array of new commercial relationships that had hitherto been impossible. "He never let us forget," recalls one former employee, "that we were not 'protecting music,' but 'developing the basis for a civil society in cyberspace.' "
David Van Wie, who became Shear's collaborator in the InterTrust venture in early 1991, says that while Shear and he wanted to market a software product eventually, they understood that they first needed to develop a bulletproof patent portfolio. "It would be a backstop if we weren't successful with technology development," he explains. The patents--which would encompass both software and hardware solutions to the problems--would give the young company a potential source of revenue via licensing.
On Feb. 13, 1995, Shear filed a behemoth, 1,000-page patent application, referred to in-house as the "Big Book." It incorporated InterTrust's sprawling vision of a method for conducting electronic commerce securely. Even that was really just the first installment of Shear's vision; for years afterward, InterTrust filed periodic supplements to the Big Book as well as entirely new patent applications.
With the patent application in place, Shear then turned to the business of producing an actual product: a software tool kit to be known as the Commerce Architecture. The tools would include software to package valuable digital content; server software to keep track of validations and authorizations; clearinghouse software to accept customer payments, track usage, and pay rights holders; and software to sit on end users' PC desktops and let them open secure files.
As early as October 1995, the company announced Commerce's imminent release. Top-tier clients lined up, including Universal Music Group, Bertelsmann, National Westminster Bank, Mitsubishi, and Reciprocal, a now defunct DRM clearinghouse that had contracts with clients like Sony Music Entertainment and McGraw-Hill. But while prototypes and components of the Commerce product emerged, InterTrust did not provide its customers with a usable, complete software tool kit for three more years--and even then customers still had to design their own applications.
Having paid, in some instances, millions of dollars in fees, customers were understandably peeved. Says one: "Victor's attitude was 'Look, this is going to be the best technology ever created in the history of man, so be a good boy and wait.' "
Even without releasing a product, InterTrust awakened the sleeping giant. In 1997 officials from Microsoft's electronic commerce division held their first tentative meetings with InterTrust officials. By the end of 1998 the companies were locked in serious negotiations over a variety of possible relationships. Negotiations continued into 1999, when in April the U.S. Patent and Trademark Office granted the first in a string of patents based on the Big Book. Intense talks proceeded through that summer. Evidently anticipating an alliance, chief Microsoft negotiator Will Poole gushed to the Wall Street Journal: "InterTrust is solving problems that won't be in the mainstream for quite some time. It's visionary."
Today Poole is Microsoft's vice president for the Windows new-media platform division. Looking back on that statement, he says, "I think it's fair to say I was at times an outspoken advocate of working with them and finding ways to come up with a win-win deal, even when others, internally, weren't sure it made sense.
"Their view was that their system would effectively be the backbone fabric of all e-commerce transactions," he adds. "One could not help but be impressed with the scope of that vision. But dreams without implementation are fairly easy to come by, particularly in the software industry."
In the summer of 1999 the parties were discussing the possibility of Microsoft's paying InterTrust about $140 million for a 20% stake in the company--plus a commitment to begin shipping the company's software in every copy of Windows starting in 2002, according to a former InterTrust executive. But the deal never happened. "InterTrust passed on an opportunity better than any deal I've seen Microsoft do," says this former official, who believes the company succumbed to the "hubris" of the times. InterTrust strongly denies walking away from that deal.
At the time, of course, the tech bubble was still inflating, and InterTrust was poised to go public. Its October 1999 IPO raised $123.4 million; six months later it fetched $92.2 million more in a secondary offering. The stock, which opened at $9 a share, peaked at $97 in February 2000. InterTrust expanded to 376 people.
You can guess what happened next. By August 2001 the stock was under $1. In early 2000, as InterTrust's market cap began vanishing, Microsoft launched its
Because Microsoft provides software tools to developers, the company extensively documents the way its products work. "That's a good thing for Microsoft's customers," explains David Maher, InterTrust's chief technology officer, "but it has also enabled us, frankly, to pretty clearly see that they're infringing."
Maher speaks in measured, deliberate sentences. Before coming to InterTrust, Maher--who has a Ph.D. in mathematics--was a research engineer at Bell Labs, where he was the principal designer of the secure telephones used by U.S. military and intelligence and high-level government officials, including the President.
InterTrust does not believe that all DRM products necessarily infringe its patents. "There are lots of noninfringing security capabilities out there," Maher says--including DRM techniques. "There's a difference between how we do things and how IBM did, or how Xerox did," he adds. "Microsoft picked the way we did it. How and why, I'm not going to conjecture." So in April 2001, InterTrust sued Microsoft.
Brad Smith, who became Microsoft's general counsel this past July, groups the InterTrust case with nearly two dozen other patent cases his deep-pocketed employer has been hit with in recent years. He attributes them at least in part to the bursting of the bubble. "There were a number of businesses that had interesting and at times even valuable ideas," says Smith, "but business models that were either not likely to succeed or at a minimum were ahead of their times." Projecting the kinder, gentler face of post-antitrust-suit Microsoft, Smith continues, "In some cases, there was just an unrealistic expectation about the return that would come from IP rights. InterTrust might be--might be--one example of that." Certainly Microsoft's recent patent litigation track record tends to support Smith's point: Since 1994, when it lost a $120 million verdict, the company has won nine straight patent cases litigated to conclusion. And it's won three more judgments now on appeal.
But the InterTrust case differs from those other suits both in scope and, more important, staying power. Most of those other actions have been brought by struggling, tiny companies or even by individual inventors. In contrast, InterTrust today has $125 million in cash--and it's not going to run out anytime soon. In April 2002, with the market for DRM products still nascent, InterTrust stopped selling its products and became a pure intellectual-property company, paring its workforce down to 39 and its quarterly burn rate to just over $4 million.
A month later Sony licensed InterTrust's patents, agreeing to pay an up-front fee of $28.5 million, as well as royalties. The patents are pertinent, for instance, to Sony's branded line of DRM-protected audio and video players, as well as memory sticks and software for handheld devices, all of which look forward to a day when the record labels and Hollywood will widely release their wares in DRM-protected formats. This deal gave InterTrust the first profitable quarter of its life and represented a major vote of confidence in the importance and validity of its patent portfolio.
At the nitty-gritty level, Microsoft's defense against the patent suit is twofold: Its products do not infringe, and even if they did, InterTrust's patents are invalid. Poole emphasizes that the engineers who developed Microsoft's DRM products never saw InterTrust's. InterTrust did permit two Microsoft engineers, under a nondisclosure agreement, to spend a day looking at InterTrust's technology to try to verify that InterTrust really had what it claimed, Poole says. But these reviewing engineers were cordoned off from those who actually design and build Microsoft's products and were provided very limited information from InterTrust anyway, according to Poole.
In fact, InterTrust's secrecy was at times "surreal," Poole claims. "We were talking about making investments of millions of dollars in a private company where I personally, as sponsor of the investment, had never ever seen their product operating. I imagined myself at the time sitting in a review with Bill Gates and saying, 'Well, Bill, I haven't seen it but, trust me, Victor says it's good.' "
Poole's account does not dispel the possibility of patent infringement, however. One can infringe unintentionally; willfulness only increases the damages. And of course InterTrust executives insist Microsoft's infringement was nothing if not willful. "I don't think there's anything inadvertent about this case whatsoever," says InterTrust executive vice president Patrick Nguyen, one of the negotiators. "When we first talked to them, they had not done anything--or even thought about DRM or trust," he contends. "We spent a fair amount of time with them educating them."
As for Microsoft's challenges to the validity of InterTrust's patents, they are premised on their alleged indefiniteness, obviousness, and lack of innovation. Even outside Redmond there is some skepticism about the InterTrust patents among rival DRM researchers. During the early 1990s, if not earlier, researchers were grappling with similar problems at IBM and Xerox and at universities both here and in Japan. If any of them came across the same solutions that InterTrust later patented, those particular claims would be invalidated due to "prior art."
But until a judge and jury trudge through the tedious task of comparing InterTrust's patents, claim by claim, with a slew of "prior art" contestants and then with the inner workings of dozens of Microsoft products, no one knows if InterTrust's patents will hold up.
And even if InterTrust's chances of winning were slight, its leverage would still be enormous. "I just don't see how a company the size of Microsoft can take the risk of having this go to trial and suffering the potential consequences," says Nguyen. "We have 144 claims. All it takes is one claim to prevail."
"I think you could think of each of these claims as a nuclear warhead," adds Mark Scadina, InterTrust's vice president and general counsel. "So if ten of these get through, it would be disastrous from the defendant's perspective."
Which brings us back to Sony and Philips. Assuming their acquisition of InterTrust is finalized, they will have to decide how to proceed with this extraordinary suit--which, aside from the patent portfolio, is nearly all that remains of InterTrust.
The new owners need to decide soon, since the case is headed toward a crucial hearing in May, where U.S. District Judge Saundra Armstrong will define key patent terms. Since broad definitions often foreshadow a plaintiff's victory while narrow ones presage defeat, it is a pivotal event.
Some observers think that Sony and Philips, which have existing business relationships with Microsoft, will quickly settle, giving each side peace of mind: assurance for Microsoft that its business won't be shut down, and assurance for Sony and Philips that the guts of their brand-new patent portfolio won't be judicially nullified.
But others can't believe these companies would have spent a half-billion dollars on an unproven patent portfolio if licensing were their only goal. They see the patents as weapons for defending turf in a convergent universe--one in which the functions of TVs and audio players and computers will increasingly overlap.
"Philips and Sony don't want to be disintermediated from their customers the way PC manufacturers were," asserts one longtime DRM industry participant. "They may have found a very efficient bargaining leverage with the InterTrust IP.... This is the core of what all this is about."
It's a remarkably high-stakes battle over a market that doesn't exist yet. No company, including Microsoft, is yet making money with its DRM products. The long-anticipated "early adopters"--the recording industry and Hollywood--are still only testing the waters. There are persistent doubts about whether DRM products will ever be able to ward off hackers or win consumer acceptance. No one has yet figured out how secure music or video will compete successfully against their free counterparts, which abound on peer-to-peer sharing bazaars.
Nevertheless, Microsoft and InterTrust have each put hundreds of millions of dollars behind their belief that the logjam will be broken, and Sony and Philips are now adding a half-billion dollars of their own to that pot.
Microsoft general counsel Brad Smith claims that DRM is already beginning to find its market. "There are seven music and video subscription services today using Windows DRM," he says. "Our DRM technology has empowered more than 11 million transactions to date in terms of actual acquisition of content-protected music and the like." In fact, when Smith gets rolling on the subject of DRM, he sounds like no one as much as InterTrust founder Shear--albeit a polished, down-to-earth version. Smith stresses that the future of DRM will extend far beyond the protection of entertainment-based content. It will be used, for example, "to protect medical records, and financial data, and corporate information, and legal and business documents, and the like," he says.
InterTrust and Microsoft clearly agree that DRM will eventually succeed in enabling businesses to assert ownership over any type of digital property. The only question then will be, Who will own DRM?
While it seems quite clear that InterTrust has the upperhand don't you think it devious that they'd wait until MS had DRM in all of their latest products before bringing up a lawsuit? Do you think a judge will notice this?
Computer Geek Proverb: Linux is only free if your time is worthless.
IF M$ wins, Big Brother will end fair use as we know it in the computer world.
If the other guys wins, M$ will buy them and then end fair use as we know it period.
w00t?
Department of Homeland Security: Removing the rights real patriots fought and died for since 2001
Anybody who takes on one of the world's largest corporations (with probably the most high-paid lawyers on its payroll) and attempts to shut down 85% of their product line is very courageous indeed.
I wonder what makes them think they can pull it off.
This space left intentionally blank.
But then Microsoft countersues because it owns the rights on the letters DRM.
From the website of Intertrust:
InterTrust develops and licenses intellectual property for digital rights management (DRM), digital policy management (DPM), and trusted computing. We hold 26 U.S. patents and have approximately 90 patent applications pending worldwide. Our patent portfolio covers software and hardware techniques that can be implemented in a broad range of products that use DRM and trusted computing technologies, including digital media platforms and web services, and the enterprise infrastructure. Our research, engineering, and IP groups focus on development of next-generation technologies, invention protection, and licensing.
Locations and Employees
InterTrust is headquartered in Santa Clara, California, and the Company has 35 employees.
So 35 people and a pack of lawyers are taking on Micro$oft? Good luck brave souls.
Saskboy's blog is good. 9 out of 10 dentists agree.
I'll just stick with a quote from Bart Simpson:
" The ironing is delicious! "
AC comments get piped to
..but if Intertrust wins, it could lead to a similar 'media tax' that the RIAA wants people to pay when they buy CD-R's and other forms of recordable media.
Fortune.com has a story about Santa Clara-based InterTrust Technologies is claiming that their suite of 26 issued patents and 85 pending patents covers digital rights management technology currently in use by Microsoft.
I knew there was bound to be a period in there somewhere.
"A terrorist is someone who has a bomb but doesn't have an air force." -William Blum
If Microsoft doesn't own the patents on DRM, and will have to pay royalties to include it, what incentive will they have to include it in their operating systems?
Black and grey are both shades of white.
Time to grab the popcorn cause this looks like it could be interesting...
How in the world can they fight this? They are really going to need to invest some money in their legal department, now. They may need to increase their number of lawyers from 2 to 3.
Sex - Find It
While if InterTrust wins they'll probably just force Microsoft to rewrite some sections of their code (which may be a lot of work, but isn't crucial), it's interesting to entertain thoughts of more serious consequences.
:)
Wouldn't it be horribly ironic if a lawsuit like this brought down Microsoft - not necessarily completely, just its monopoly position - while the epic-length antitrust case hardly made a dent? I'm sure there would be quite a few Linux and Mac users dancing in the streets, as thousands of computer companies are forced to stop selling their systems simply because they run Windows.
I'd better stop now, before I let the thought get to my head.
You can bet the RIAA/MPAA will give generously and help out with Microsoft advertising - considering they'd be the only operating system in town with DRM.
Apple's already taken an anti-DRM stance, and DRM will never work on Linux simply because there's no way you can force it down the throats of your users.
Microsoft is alread paying royalties on plenty of stuff. You didn't think they came up with scandisk and defrag, did you?
chown -R microsoft * / /
chmod -R 000 *
Now microsoft owns your files, and not even they can read them!
The worldwide owner of DRM technology patents capable of stopping the XBox being sold will be Sony, the people who make the PlayStation? That's hilarious.
Remember back in the day when Sony fought like hell to make VCRs legal, saying consumers had a right to copy? At Sony Music, do they look back on those court cases and laugh?
That they claim one hundred and eleven patents on DRM? Dear god, how can they have thought of that many different ways to say "All your code base belong to us"?
If you were blocking sigs, you wouldn't have to read this.
Patents are not about damages. If InterTrust's patents are confirmed, they have the monopoly to use the technology described in the patents.
If they don't allow Microsoft (or any other company) to use it, then Microsoft will have no other choice than to remove all this technology from their products.
Of course that's now what InterTrust wants, they just want one or 2 billion bucks from MS ;-)
InterTrust own a whole bunch of patents. In fact, that is about all they own. They derive basically all their income from suing other companies who in any way attempt to limit the copying and transferrability of works in the digital space. (a.k.a. Digital Rights Management)
I expect them to sue: Microsoft, OpenTV, Liberate, PowerTV, Nagravision, NDS, Canal Plus, and just about anyone who has anything to do with conditional access if they haven't already.
You can thank overly broad patent protection that allows you to patent an idea (remember 1-click ordering), instead of forcing the patent holder to develop a product or implementation that actually utilizes the idea.
The only thing InterTrust has ever done is create a major payday for lawyers.
This reminds me of one of those Godzilla vs. Mothra movies....both of them are big, ugly monsters, and a lot of crap is gonna get blown up before the bigger one finally wins. :/
"Quoting famous computer scientists out of context is the root of all evil (or at least most of it) in programming." - K
Comment removed based on user account deletion
First off, I have no doubt that they'll sell out. I cannot imagine anyone, no matter how crazy, refusing an offer of nearly $500 million in cash. Which means this will become, essentially, Sony vs Microsoft. (hmm, where ELSE is that battle happening) And either way it goes, it's not going to do the consumer the slightest bit of good. (ok, well, it could force the X-Box off the market and thereby let Rare go back to making Nintendo and PS games. That's good, right?) Really, does anyone else feel like we're just standing around watching Godzilla and Rodan duke it out, with nothing to do but pray they don't trod upon us?
Bush: He's Liberal in all the wrong ways.
Actually, MS are salivating over DRM for an entirely different reason: they think business will pay them pots of cash for it.
Just imagine how good a "your documents can't be leaked, can't be stolen, changes can be tracked and you have total control over which employees see what" must sound. It'd make business confidentiality much easier. Pay-per-play is a lucrative area, but DRM has far wider uses than just that.
I've been told by MS execs that there is kind of an internal debate raging about whether micropayments or DRM is the way forward, but that DRM was winning because it could be commercialised and sold as a feature to business. They didn't seem to regard the content industry as the main target for it: individuals and organizations who wished to control their own business information were a big deal.
I'm actualy on Microsoft's side this time arround. As great as it would be for them to have to pay to release their products, InterTrust sort of represents the bigger evil here. Here is a company that went to the patent office with an idea, but no product, and applied for the patent. Then they rcieved the patent and began developing a product, which they evidently had other companies investing millions in and then never truely turned out a product. From what I read of the article, they turned out an essentialy cleaned up version of their patent and told the companies now you just have to write the software to make it work. They have since shut down that side of business and now spend their days doing what? Sitting on patents waiting for someone to make a similar product and then claim ownership? They don't have a product, and you can't patent and idea. I hope M$ wins this one.
T Money
World Domination with a plastic spoon since 1984
I hate MS as much as anybody, but this is yet another example of one company that produces nothing but ideas holding hostage a company that's actually implementing ideas.
I often wonder if we're at the point today where patents hurt innovation more than they help it. Especially in the computer industry, do we really need a patent system?
How did Amazon's 1 click patent help society?
If patents aren't helping society, then they should be nixed. Copyright and patent systems are only useful so long as it benefits society. I believe firmly that copyright law benefits society, but I'm not so sure about patents anymore.
Microsoft LOVES patents. They even love paying for them AT A VERY high price. It helps exclude the competition.
The outcome is already known, Microsoft will capitulate with InterTrust and will make it cost huge bucks. InterTrust then gets to yell "see, my patents stand up to scrutiny and they are really valuable" and nukes everyone else out of the DRM buisness by charging over the top for licencing fees.
Fortunately for us, DRM is a flawed concept and anyone who ever tries to get to close to it ends up paying with lost customers and diminsihed loyalty.
A paper by Carl Shapiro discusses this argument better than my rant.
BTW - this practice is not exclusive to Microsoft.
"DRM OS" is already out there.
It is called Windows XP and Windows 2000 SP3
digital rights management
Please remember that it's 'Digital Restrictions Management'.
There are quite a few stories out there about companies who were a) negotiating technology deals with Microsoft, b) the deal fell through, and c) Microsoft introduced a technology of their own with striking similarities.
The most conspicuous was probably the Stac patent-infringement suit.
What these stories have in common is: first, it is probably not so much a case of Microsoft outright stealing technical details, but more "we like that general approach, this company has shown us that it works, let's do it that way ourselves." For every case of outright infringement, there are probably a dozen more of moral, but not legal theft of ideas.
Second, and more ominous, even in those cases like Stac where Microsoft was challenged in court and lost, in the long run it didn't matter. Stacker is a distant memory, Stac Electronics is all but forgotten, and their website isn't responding right now...
What should have happened is for somebody like RMS to have thought up DRM first and generated patents on it and then refused to license them to anybody. ;)
Gentoo Sucks
As a former Intertrust employee, maybe I can shed some light on this.
There are a lot of comments stating that Intertrust had nothing more than a patent portfolio. As someone who ran Intertrust's product live on the internet for demos and trials, I can attest that that is not true. Intertrust provided SDKs to companies interested in DRM technology, and we had an in-house product showing one possible implementation. The product was real.
Second of all, this lawsuit has been in the works for years. I heard about it in mid-2000 when I worked there, so I wouldn't be surprised if they were working on this in 1999. From my understanding, it came about from ITRU's talks with Microsoft, which resulted in Microsoft putting out white papers on DRM technology that looked amazingly like ITRU's white papers, except with the ITRU logos replaced with Microsoft logos. Really. I expect a decision in ITRU's favor, which will be stuck in the appellate courts for approximately eternity.
Anyway, Microsoft is evil, and perhaps ITRU is evil if you don't like patents, but there are plenty of good uses for DRM (think medical records), and anytime someone can stick it to Microsoft, they should.
Cheers!
I hope Microsoft gets the shaft on this. MS has a long history of running roughshod over other company's patents, and has been sucessfully sued for patent infringement and copyright violation (including using source code it has no rights to in it's products) several times. If there is a clearer case of corporate evil out there than what is going on here, I don't know about it.
InterTrust is clearly the originator of DRM technologies. They have already implemented software products in a variety of devices such as MP3 players. Microsoft is clearly just trying to rip off a technology invented and developed by a much smaller company.
ut this is yet another example of one company that produces nothing but ideas holding hostage a company that's actually implementing ideas
InterTrust has several implementations that are part of currently shipping products from companies like HP and Nokia. They are not just an IP holding company. IMHO this is clearly a case of Microsoft trying to rip off a technology.
This would be a Good Thing (tm).
Noting the history of MS and it's policy, this is the mating ritual of a company that wants to get bought by MS. They are just making sure that their asking price gets accepted.
"Science is about ego as much as it is about discovery and truth " - I said it, so sue me.
My money is on the monkey with the stick.
Is this truly the only Earth I can live on?
Their shit gets everywhere, and is a pain to extract. If we don't resist, we will pay eventually.
then where will this leave the linux desktop and GNU. Certainly GNU will not be able to liscence the DRM codes. Re-inventing them will be illegal. Even downloading them will be illegal, like DeCSS.
the only solution will be for commercially liscenced media players for the linux desktop. Probably made by MS or liscened by them (assuming as suggested in the article, MS will get the PC slice and sony will take the set-top slice.)
of course MS thinks Linux and GNU with its GPL are cancer. They have never made office for Linux. Why would they make DRM code for linux avaialble. Without the ability to play media the linux desktop future is dead or atleast a niche. Even servers, which might need DRM for say banking or other confidential data, or for government docs protected by DRM, will be dead if they cant do DRM
so the way i see this playing out is microsoft fights the patent. Nothig to loose. then they pony up 200 million to buy a third of the company from phillip and Sony (that's the same amount they offered before.). It will be an offer sony/phillips cant refuse. (in the corelone sense of the term). then MS uses it to enforce its PC hegemony and in particular kill GNU and Lnuix
Some drink at the fountain of knowledge. Others just gargle.
Wouldn't it be valuable to start a "Prior Art Foundation" where EVERYONE could contribute ideas, process or whatever, and that the "prior art foundation" will only certify at what date the document arrived at the "Prior Art Database". Add some metadata and serach capabilities and we'd be able to cover mostly anything in 5 years, and overly broad patents days will be over? I mean, we should all submit ALL kind of idea, even if stupid , obvious or the "only way to do it" abeit trivially. It doesn't matter if we'd want to do any of those, but at least there would be specific documentation somebody said that first, so that they can't claim a patent. Even worst, they'd have to research this HUGE archive of "anti-patent minefield" because if not, they might end up putting resources in a field that is anti-mined, so they want to be able to go sue happy as they planned (ie: 0 unfair revenue, which is what they want).
unfinished: (adj.)
be in breach of the DMCA?
Now if only the judges, lawyers and everyone involved on both sides would be charged under the DMCA...
In the free world the media isn't government run; the government is media run.
For being the first Slashdot poster to understand the meaning of the word "ironic".
Patents are issued WAY too liberally nowdays. Be glad you're not paying royalties to the 200th generation descendents of the inventor of the wheel. If the IP interests had it their way, you would be. There are some things that are so simple that any idiot would have invented them given the requisite technology. For example, instant messaging or pipelined processing. Things like that should never be patentable. You should only have protection for your specific implementation that you develop and sell, not some ridiculously general category of products that anyone else could and would have come up with had you not existed.
Repeal the DMCA!
As an individual who was (un)fortunate enough to use some early products based on that Intertrust SDK, I can tell you that the system was a disaster. That is to say, it certainly worked well enough at protecting content... it just tended to protect it from legitimate users as well as unauthorized ones.
Of course, I can't even tell you if it really did protect content from unauthorized users, because the company kept such ultra-tight control of their product that real cracking attempts were all but impossible. I'm told that you had to install special physical security arrangements in an office before you could even get a look at the damned SDK. Not to mention a pile of NDAs and licenses that pretty much kept you from even trying to get it over 60mph (metaphorically speaking.)
As a company trying to produce a real, tangible product, Intertrust was a disaster. Whether their software could have eventually lived up to the hype we'll never know, because from their actions it appears that they had were either incompetent or were going out of their way to avoid producing a viable product. What they were really good at doing was convincing other companies-- sight unseen-- that they were the greatest thing since sliced bread. The companies who did eventually use their product all went in enthusiastic and raving, and came out indifferent.
From the enthusiasm of the companies out to buy them, it certainly looks like Intertrust haven't lost their touch at selling themselves. And from the effort they're throwing into this lawsuit, it sure looks like Intertrust wants to go into this deal with more than just their product (good idea, guys).
Like they wouldn't have the money to do THAT a few thousand times over?
Anyone who is going to go up against MS has to be doing it without ANY hope of financial gain, and a willingness to stay in court for as long as it takes (even years) before they give up trying. Somehow, I don't think Intertrust and their lawyers are going to be willing to play martyr.
Moral: don't play chicken with a bus.
File under 'M' for 'Manic ranting'
You mean hard disk's drivers of unsuspecting public stop working; Windows no longer being able to access user's hard disk; user's no longer being able to access all the p0rn stored on those disks; ...?
MSDOS: 20+ years without remote hole in the default install
So microsoft will have to licence/pay royalties on DRM technologies.... they will just pass the cost onto the end user with a higher price.
Oh....
Schadenfreude, schadenfreude
Isn't it so sweet?
Billy's such an asshole
It's so great to see him beat, oh!
Schadenfreude, schadenfreude
Will this show to them
Why our rights must not be
Bitchslapped down by DRM?
Sadly, it probably won't; M$ isn't known for being cowed by a taste of their own medicine. Nevertheless, maybe we'll actually see something good come out of this...
Same incentive as fonts - they're licensed, as is a ton of other stuff. Check the "About" box of just about any MS app / applet, other companies are credited (and paid for every copy sold, normally). That is a part of the cost of Windows - same thing for OpenOffice.org/StarOffice, it's paid per-copy because Sun pay royalties per-copy.
Author, Shell Scripting : Expert Re
This is an interesting issue, but it all boils down to exactly how broad InterTrust's patents are. The article mentions prior implementations of DRM which InterTrust does not claim patent rights over, in particular, IBM, which as a software provider is now firmly in the pro-Linux camp. If its version of DRM is fully featured enough to stand on its own, then perhaps Big Blue will find it advantageous to issue a royalty-free license to the Linux community.
The other option is that the pieces of GNU/Linux which currently work without DRM will continue to do so, and any parts that require DRM in the future will simply be restricted to the retail market, just as many Linux distros contain packages (e.g. SO) that are retail-only.
There are two kinds of people: 1) those who start arrays with one and 1) those who start them with zero.
DRM will fail in the long run, PERIOD. This is what Microsoft and others simply refuse to admit. This is what most if not all of us here on /. have come to a consensus on, right? Wasn't someone told to STFU by the RIAA... over a paper criticizing a DRM idea called the Secure Digital Music Initiative?
If Microsoft sells their flavor (or any flavor) of DRM to a content creator under the impression that it is 100% secure, they're flat out liars. All it takes is *one* person to crack the code, and release it over the 'net. Microsoft realizes they can't offer 100% security, I'm sure. Since they do realize this, they're going to tell their clients that their stab at DRM is better than no DRM at all, and companies are going to bite.. as they already are.
But it all comes down to this.
The instant people can't use their Windows computer to upload files to their MP3 player, a dangerous consumer backlash will occur. People won't buy the new flavor of Windows if it prevents them from ripping their own CDs, or if they find out they can't use Kazaa with it either.
Furthermore, nobody cares about WMA, which is a huge problem for Microsoft considering they NEED to use WMA for their DRM to work in the first place.
Truth is, consumers have already spoken. They want iPods, not the SDMI crap that Sony put out and forces NetMD and MemoryStick players to use.
SDMI ~ Add a few O's and replace with I with a Y and it better represents what it attempts^Hed to achieve.
Linux may be able to play DRM media but my guess is that larege sectors will be locked up by MS and locked away from Linux
Except for a few things:
1)Software patents are currently not allowed in the EU, and are effectively unenforceable in the Third World. This means that regardless of whether DRM is owned by InterTrust or Microsoft in the US, competing implementations of can legally proceed in the rest of the world. American home users of Linux distros will easily be able to download DRM patches from EU servers if and when the time comes. Businesses won't be able to totally skirt the law, but nevertheless, the widespread existence of free, illegal packages will exert a downward pressure on the price of legal packages and should keep them within reason.
2)Linux isn't going away. It's being increasingly used by governments outside of the US. InterTrust can either play along and offer to license their own version of it, or they can find themselves locked out of foreign markets as the international community converges on a non-American standard.
3)MS in any case won't be able to prevent other operating systems from using DRM even within the US. This would certainly run afaul of antitrust laws.
There are two kinds of people: 1) those who start arrays with one and 1) those who start them with zero.
The best thing about the DRM game is that all the involved parties are really serious, and draconian, about intellectual property. Everybody wants to own the technology, and I bet that will be its eventual downfall. (How many useless proprietary "secure audio" formats are there, now?)
you are a winner and a loser!
Certainly Microsoft's recent patent litigation track record tends to support Smith's point: Since 1994, when it lost a $120 million verdict, the company has won nine straight patent cases litigated to conclusion. And it's won three more judgments now on appeal.
Interesting. Microsoft has quite a record of stopping abstract thought patent trolls. I hope they win this one, too.
Best. Comment. Ever. Enjoy!
Which way do I go? Do I lambast yet another patent company for trying to patent the patently unpatentable? or should I revel in the fact that Microsoft is going to get slapped?
Oh the confusion
The problem here is that for DRM to work, it has to be under control by one company or consortium - like the DVD CCA
Hmm. You may be right about that. I'm not entirely convinced that there is no way to have an open-source implementation of DRM. I don't really know anything about cryptology, but I don't see why in principle DRM couldn't rely on PGP type authentication, i.e. that the implementation could be made source-code available, and the "rights" could be encoded in the sender's certificate without a third party authentication repository required. However, this PDF paper by Intertrust seems to conclude, in somewhat self-interested fashion, that a trusted 3rd party is necessary. On the other hand, in the real world we see the ongoing development of OpenPIMP, excuse me, OpenIPMP which seems to contradict your assertion. An interesting point, nonetheless, and I think you deserved to be modded up.
I think DRM/trusted computing is inherently evil.
I think you and I and about 99% of the Slashdot community are in agreement on this. The remaining 1% consisting entirely of Twirlip of the Mists and his varies friends and fans.
There are two kinds of people: 1) those who start arrays with one and 1) those who start them with zero.
The Xerox patents predate the Intertrust ones and they describe the essentials you need.
The issue isn't essentials -- the issue is claim limitations. If the prior art has each and every claim limitation, you would be right. If it doesn't, you would be wrong. The reason for doubting that you might actually have done your homework arises from the plain lack of specificity, either here or in your prior postings.
As for having to disprove each and every one of the 1500 claims before having standing to dispute Intertrust, that position is so stupid that you can only be a shill for them.
So, the patent is stupid, the applicant is stupid, and those who challenge the namecalling are making stupid argument and necessarily shills. An astonishing exercise in argumentum ad hominem, but so what? The name-calling is not only misplaced, but you are just plain wrong. Suffice it to say, I am not affiliated with any of these entities. However, it would not matter -- your name-calling doesn't respond on the merits of the arguments. Even if I was a shill, at least I made a sound argument.
Filing claims says nothing about their validity. I don't believe for a minute that the USPTO examiner actually read them all before giving them the rubber stamp.
of course you don't -- since you clearly have spent no time at all yourself analyzing their validity, why should you believe anyone else did? indeed, Microsoft will spend a fair amount of time on the subject and time will tell. In the meanwhile, we can give appropriate credit to those whose only argument is namecalling?