Microsoft Settles with InterTrust

By Peter Galli  |  Posted 2004-04-12 Email Print this article Print

A deal that calls for Microsoft to pay $440 million for a license to the multimedia anti-piracy company's patent portfolio also resolves all outstanding litigation between the two.

Microsoft Corp. on Monday will announce that it has settled another outstanding lawsuit: It will pay multimedia anti-piracy company InterTrust Technologies Corp. a one-time payment of $440 million for a comprehensive license to InterTrusts patent portfolio in an agreement that also resolves all outstanding litigation between the two companies. In addition, the agreement allows Microsoft to accelerate the development and promotion of digital rights management solutions. As part of the agreement, InterTrust, of Santa Clara, Calif., also receives rights under Microsoft patents to design and publish InterTrust reference technology specifications related to DRM (digital rights management) and security. Marshall Phelps, deputy general counsel and corporate vice president of intellectual property at Microsoft, said in a statement, seen by eWEEK on Sunday night, that the licensing of InterTrusts patent portfolio "reaffirms Microsofts commitment to the importance of intellectual property rights as well as our commitment to our customers to stand behind our products in these emerging technology areas.
"One of our goals with this and our broader intellectual property (IP) licensing program is to provide peace of mind for our customers and partners by letting them know that patent licensing is our responsibility," he said.
Will Poole, senior vice president of the Windows client business at Microsoft, said in a statement that DRM solutions are essential to secure valuable personal, business and commercial content in a massively connected world. "With our existing technology and IP portfolio combined with our new agreement with InterTrust, Microsoft is committed to working with the broader industry to accelerate the promotion of DRM standards and solutions. "Microsoft and our partners are delivering the most powerful and flexible rights management solutions in the industry, while assuring customers that we have the IP necessary in striving to secure our products," Poole said.
For his part, Talal Shamoon, CEO of InterTrust, said the agreement validates InterTrusts intellectual property portfolio "as seminal to advancing DRM and trusted computing in the marketplace." "InterTrust will continue to help drive the adoption of these important technologies through our inventions, licensing programs and reference technologies, and we expect to develop a thriving licensing business going forward," he said. InterTrust first filed suit against Microsoft in 2001, alleging that the software maker violated 11 of its patents with Windows, Office, Windows Media Player and Xbox. Last July, a federal judge sided with InterTrust in its suit against Microsoft. InterTrust was then bought for $453 million in November by Fidelio Acquisition Co., a venture in which Sony is a key partner. Next page: Latest in a string of settlements.

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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