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

Third Party?

[BandwidthHog]

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)

Re:PAtents.

[eggstasy]

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.

Re:PAtents.

[donnz]

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?

Re:Microsoft using monopoly power again!!!

[Daath]

Your first, second and third points are noteworthy. Valid points that annoy me too. But.

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.

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 ;)

Re:PAtents.

[LordSah]

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.

It's pretty troublesome

[eclectro]

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.

Re:Microsoft never pays per license royalties . .

[atcurtis]

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.