Microsoft, Burst Reach Antitrust Settlement Deal

By Peter Galli  |  Posted 2005-03-11 Print this article Print

Updated: The agreement brings an end to almost three years of litigation between the two companies. Inc., the Santa Rosa, Calif., developer of video and audio delivery software, has reached an agreement in principle with Microsoft Corp. to settle its current antitrust litigation against the Redmond, Wash., software maker. In a statement posted to its Web site Friday, Burst said Microsoft had paid a one-time fee of $60 million for a non-exclusive license to Bursts international patent portfolio.
For his part, Tom Burt, a corporate vice president and deputy general counsel for Microsoft, said in a statement released late Friday that the license was for use only by Microsoft in its own product and did not include sub-licensing rights.
The patent license also settled the outstanding litigation between both companies. "While we were confident of prevailing in this lawsuit, we have been open from the beginning to finding a reasonable way to resolve this case. Securing a license to the Burst patent portfolio through this settlement allows us to focus on the continued development and deployment of Windows Media technologies to deliver the ultimate media experience to our partners and customers," Burt said. The agreement brings to an end almost three years of litigation between the two companies. Burst filed suit in June 2002, accusing Microsoft of developing its own multimedia software for moving audio and video more quickly over the Internet after discussing the technology for months with Burst. The company also claimed theft and anti-competitive behavior by Microsoft. In August, an attorney for deposed Microsoft chairman and chief software architect Bill Gates and said he planned to ask a judge to make the testimony public. Click here to read more about the Burst attorneys deposition of Gates. Microsoft has been steadily settling many of the outstanding lawsuits against it. Last April, its then-CFO John Connors told investors that Microsoft had "worked hard to clear up a substantial amount of our legal exposure," including with America Online Inc., and "all but a handful of the state class-action suits." "We will continue to focus on getting closure on our legal matters, but tremendous progress has been made," he said at that time. Among the settlements announced last year was the $536 million payment to end the antitrust battle with Novell Inc. and the news that Microsoft had resolved some long-standing disagreements with trade group Computer & Communications Industry Association. Read more here about Microsofts settlement to end the antitrust battle with Novell. In the biggest settlement announcement to date, last April, Sun Microsystems Inc. and Microsoft resolved their legal issues in a $1.6 billion settlement that called for the two companies to work together during the next 10 years. That same month, Microsoft said it would pay multimedia anti-piracy company Intertrust Technologies Corp. $440 million for a comprehensive license to Intertrusts patent portfolio in an agreement that also resolved all outstanding litigation. And in January 2004, SPX Corp. said Microsoft had agreed to pay $60 million to the company to settle a patent infringement lawsuit after a jury awarded SPXs software unit, Imagexpo, $62.3 million in compensatory damages because Microsoft had infringed on a patent for conferencing software. The jurys decision was subject to appeal. Editors Note: This story was updated to include a confirmation of the settlement from a corporate vice president and deputy general counsel for Microsoft. Check out eWEEK.coms for Microsoft and Windows news, views and analysis.
Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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