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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.
$440 million? Eeeek.. thats a lot of money for something that seems to relatively simple :-/ I mean, for $440 million im sure microsoft can develop a DRM system 100000x better then what they have right now.
I've been wondering if the implication is what I think it is... if you use MS software through-and-through you're fine, but if you mix software from multiple companies, you're liable to InterTrust for royalties?
Could MS have crafted a sweeter deal if they tried? (ya know, other than the half billion dollar payout)
Quantum materiae materietur marmota monax si marmota monax materiam possit materiari?
Hey, for once I like software patents (I know, hypocracy and such). If someone's patented DRM in general (anything's possible it seems), maybe they can go SCO and stop all the other companies from implementing DRM. We might get a break from this mess.
Also, I'll be the first(?) to point out the irony in this. These people are so concerned with Intellectual Property, but they are infringing on it themselves. Not that they're "at fault", but that the system is messed up.
Thank god patents are so expensive. I wouldn't want a new class of average joes filing for thousands of stupid patents. We have had enough of that with cybersquatters and spammers.
1. License DRM patents
2. Release DRM Software
3. Wait for DMCA to get struck down as a show of good faith
4. Sue unsuspecting F/OSS developers writing a WMP DRM bypasser for xmms for "patent infringement"
5. ???
6. Profit!
--- You shall know the truth, and the truth shall make you mad- Neal (not Cowboy) Boortz
4) Patents CANNOT be bought and defended by "small" people. Patents cost about 40,000 EUROS a pop and this is not money for the "small" company. This is money for the large company.
Except in New Zealand where registration ony costs a few hundred bucks and the patent office prefers to let the courts decide what is a valid patent, or not. Makes us a lovely target for people wanting to lauch their patent portfolio. Good, eh?
-- Free software on every PC on every desk
It's a settlement. Microsoft settled with InterTrust, by agreeing to license their technology. This license means that they can use the technology in their products. Third parties have a disadvantage in that they ALSO (surprise) need a license to use that same technology. It's logical, and it's normal business practise.
A small company doesn't need to spend more than (or in fact anywhere near) US$ 440.000.000 for a license. It's cheaper. Microsoft just struck a deal. Microsoft wins and InterTrust wins.
Now go sulk somewhere else
Any technology distinguishable from magic, is insufficiently advanced.
Patents also encourage people to invent and innovate. Basically, any invention or novel piece of engineering would immediately be copied by competitors. If you make some nifty widget, as soon as you come to market with it, much larger and more established companies will immediate copy and undersell you (economies of scale).
Folks like Dean Kamen (inventor of the Segway, along with a host of other things) wouldn't exist without patents. They enable and encourage individuals and smaller companies to be inventive, because they will be able to capitalize on their idea. Patents allow people to be professional inventors, much like copyrights allow people to be professional authors or musicians.
So, I'd argue against your premise that they 'do nothing but slow down an industry and promote laziness'. A patent-less industry would immediately boil down to the biggest manufacturers. Soviet Russia is an example of a such an industry...technological development lagged very much behind the west.
Here is an earlier article discussing the Intertrust patents, and their apparent broadness. There are links to the actual patents themselves.
As other posters have noted, this settlement gives Intertrust a leg up on the competition (which they probably will sue now).
It would be an interesting exercise to see if there are any publications that discuss "trusted computing" prior to the Intertrust patents.
Also, Intel announced a mobile cpu that has a DRM coprocessor in the same package. Intel could head this direction with all their chips.
Given all the evils of DRM, I would rather see a chip from Intel with DRM succeed, rather than using Microsoft palladium, Phoenix DRM bios, or other software component. Having it in hardware makes it a level playing field for every developer, commercial or open source. I am not saying any of it is good, only what the lesser of evils would be.
Preferably their would be an open source competitive solution.
Take the cheese to sickbay, the doctor should see it as soon as possible - B'Elanna Torres, "Learning Curve"
It is more likely that InterTrust wanted to be paid with a lump sum instead of by royalties...
The last company who licensed technology to Microsoft on a royalty basis ended up getting nothing from Microsoft because they gave it away for 'free' so there was no royalty to pay.
You may have heard of them: The company is SpyGlass... the software they wrote is what you know now as Microsoft Internet Explorer.
The directors behind SpyGlass tried to sue Microsoft - but ran out of money. So they have quit the PC Software business alltogether.
So, IMO, InterTrust is smart to negotiate a lump sum payment... Obviously, they couldn't trust Microsoft to honor their side of a royalty-based agreement.
BTW, there are other situations where Microsoft licensed technologies on a royalty basis and then gave them away 'free' to avoid having to pay any royalties.
-- The universe began. Life started on a billion worlds...
-- Except on one where stupidity was there first.
Consider the fact that patents were never as outragous as they are now. Now consider the fact that large corporations have the most influence on political decisions. Now imagine what your going against. By simply saying that patents are alright under certain circumstances you give them something to stand on. Who decides these circumstances? The ones with the money. We can not simply "fix" the patent system, because to do so would mean some force needs to cause this fix to happen. Where is this force going to come from? Scientists, engineers, teachers, etc? Not really, because it is already apparent that most of them believe that we just need some "fix" to the system. Well, maybe people will get together and say we need a fix. So what do we agree is the fix? Not everyone has the same idea on what a "fix" to the system should be. A lot of arguing amongst the common person, and the lawyers, companies, and wealthy investors make the final choice anyway. Patents are about control. Before communication had reached the level it is today, control did help in progressing science and technology due to reasons I will not go into because I do not have space or time for that. Today, it has a lot less effect on progress and instead hinders it. Go ahead, put some real thought into the effect of the patent. Consider the fact that it was originally created to help secure investment. Now think about what it means to invest in science and technology in todays world. More educated people today and better communication than ever before. Resources? This is the information age. Imagine two choices. The complete destruction of all of our technology, or the complete destruction of all of our knowledge. Which is more valuable? So why make the system of knowledge so complex that it is entangled in an entire web of legal and political arguments?
Or maybe we can "fix" the system, but some level of control still creates problems, and therefore hinders progress. The question is, how much hindering are we willing to put up with? How many more lawyers do we need to argue the laws? How many more lawsuits until half our population is working on interpretting law?
Question everything.
I was reading the history of the laser here and found no mention of your story about a laser patent. The only mention of patent troubles actually had to do with the original inventor NOT recieving a patent. Are you sure your story is accurate? I always thought the reason for the "explosion" of lasers had nothing to do with patents but rather that there were technological developments that made the lasers cheap enough to be used in every day applications.
Software built in India or China will not be legal in the US if they don't adhere to these ridiculous software patents.
That's not a problem.
Software will be made in India, China and elsewhere, and web sites based there will sell their software over the Internet to US customers, despite the infringement of US patents. US home customers are sure to buy and use it, even when businesses daren't.
Ironically, the shareholders will be based in the US for a while longer. Looks like you guys are funding your own replacements! :)
This will extend to programmable consumer hardware too. For example, patent-infringing mobile phones from China face obstacles to being sold in the US (except on the black market), but firmware upgrades which add new features can easily be sold over the 'net.
There are two ways for the US to retain its market strength. One is to cut down on its own patents and reduce the economic friction they cause; the other is to extend the friction to other countries. The latter strategy seems to have the upper hand right now, and is one reason for the push toward global patent treaties. Fingers crossed.
-- Jamie
the InterTrust patents are here (25 issued patents)
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?
Kinda reminds me of the game Railroad Tycoon (one of my favorates). You start out and grow your railroad, trying to box the other companies in as you grow, but once you reach a certain point the actual trains don't matter at all any more because thier profits are such a tiny % of your cash on hand, and all your profit comes from financial wheelings and dealings where you buy/screw the competition. Microsoft seems to have reached that point. They have to do radical things to keep thier software profits growing, and have a massive war chest to fund it all.