Microsoft Pays $440M to License InterTrust Patents

theodp writes "Microsoft is paying $440 million to InterTrust to settle a three-year-old patent infringement lawsuit over DRM technology for protecting music, movies and other digital content against piracy. Under the settlement agreement, customers can use Microsoft products and services without a license from InterTrust. Developers, however, may need a license from InterTrust for other uses, including the combination of Microsoft technology with third-party technology." C.J. adds a link to the New York Times' coverage of the settlement.

Comments

Cost benefit analysis?

[EdipisReks]

what is the cost benefit analysis of this? would microsoft have saved money if they had simply licensed everything first, or is the $440 million cheaper? i imagine that big software companies do the same kind of CBA that auto companies and the FAA do.

Re:$440 million?

[frovingslosh]

You don't understand. This is $440 Million that Microsoft gave to InterTrust so that InterTrust would have a big warchest to go after everyone except Microsoft who tries to compete with Microsoft. It's a drop in the bucket to Microsoft (see the last few weekly Cringley articles), and it is an even better way to grab position than to give SCO money under the table to have them try to kill Linux.

Re:Third Party?

[Anonymous Coward]

Except for the fact that Microsoft has been touting how many choices you have for their DRM protected content. Now they've landed themselves in the same boat they are accusing apple of being in wrt FairPlay/iTMS.

Three year old infringement?

[Poison_kitty]

Sorry but that rings a few bells there, Big-Ben sized bells. If it was really tha important to them in the first place wouldnt they have sorted it out when it was first found to have occured? It seems to me that microsoft are completely willing to put individual people in jail for minor acts of copyright infringement but when it comes to a whole company theyre more than happy just to pay them off and hope it all goes away.

3rd blow to them in a short period

[bangular]

3rd monitary payout from them in a pretty short period of time. Makes me wonder if they think they can just pay everyone off (has worked so far).

New head of Legal Dept.

[Simple-Simmian]

Microsoft® has a new head of it's leagl department. Thats what up. Settling and trying to hold on to it's money. If they had lost ( just might have) they would have spent more. This make good business sense. I still hate their guts but it makes sense.

Look for them to make more settlements.

Okay, dumb question

[caffeineHacker]

I know they are a huge company...but I really don't see how they can afford to keep losing money like they do. A few billion to Sun here, millions to BeOS here, $440 million for some patents, losing millions on X-Box, millions in lawsuits and fines, funding SCO, etc. It seems that eventually they'd run low on cash to throw away on stupid crap...but I've never had billions of dollars so I guess I wouldn't know.

Re:Okay, dumb question

[fermion]

I think there are two related reasons. First, MS can set the price of products to whatever they want. That means that they have a high profit margin, for the time being. They need to invest that money in some way. They are increasingly becoming even less of a devlopment company. The two flagship products, Windows and Office, are more or less stagnant. The OS they promised next year has been pushed to the next decade. Office has had no significant improvements in years. So they don't invest in new software products, and the xbox can only eat so much. So where to invest the money?

This leads to reason two. They say they want to follow the IBM path of making monye off IP. This means that they have to clean up thier IP portfolio. The money is largely irrelevent as it is almost free and there is probably no better investment. The license fess they collect will be pure profit.

As an aside, it is a very shrewd tactical move. Intertrust now has another company paying it royalties. It has a basis to demand payment from any software that uses the technology. This means that MS, with sony and Philips, has cornered the market on this particular DRM. In the end it mean a new oligarchy of music distribution. Goodbye fair use on *nix systems, goodbye iTunes.

Microsoft using monopoly power again!!!

[brxndxn]

Dammit! It seems like everything bad that happens to Microsoft, Microsoft turns around and uses it in their favor...

I mean:
- States sue Microsoft for abusing monopoly powers; Microsoft pays lawsuit with Microsoft products that indoctrinate kids (future buyers) into Microsoft products.

- Microsoft sues Lindows for it's impossible common word trademark of windows in US courts. Microsoft loses. Microsoft sues Lindows in other world courts; Lindows is forced to change name. Microsoft loses, yet wins. Lindows runs out of lawsuit money.

- States sue Microsoft over alleged undocumented Windows routines that allow MS software to run better on Windows than other software. Source code is released later on that shows MS lied in court. Nothing happens to MS!

How is this new lawsuit good for anything but Microsoft? It's like Microsoft basically paid $440million to ensure that 3rd party software has a disadvantage - something Microsoft has already been sued for! This, once again, screws consumers by causing 3rd party manufacturers to pay more for licensing and allows MS to eat another market.

MS is really clever at screwing us all in the ass as efficiently as possible.

Re:With all these incredible limitations on coding

[killjoe]

"The US will become a software 3rd world country if you don't repeal the software patent law."

In most third world countries a handful of people control virtually all the wealth. There are just a few very powerful companies and tons of little mom and pop grocery stores.

Seems to me we are well on our way.