Microsoft Spyware Acquisition Hits Ownership Snag

A private Florida company claims it co-owns the code and definition updates for Giant AntiSpam, which Redmond acquired this week.

Microsofts big move into the anti-spyware business has hit an immediate speed bump, with questions swirling around a Florida companys claim that it co-owns the Giant AntiSpyware code—and all future definition updates—that Microsoft purchased earlier this week.

Sunbelt Software Distribution, which markets a spyware-protection application powered by Giant, reacted to the Microsoft acquisition with glee, but the software giant isnt so sure that Sunbelts ownership claim is entirely accurate.

"This is fantastic news for us because we co-own the Giant code and all future definition updates," Sunbelt president Alex Eckelberry said in an interview with "We now get the benefit of the Microsoft research on anti-spyware to give us, bar-none, the best anti-spyware signature database on the market."

Amy Carroll, director of product management in Microsofts security business technology unit, acknowledged the Sunbelt co-ownership claim but believes Eckelberry is stretching the extent of the relationship going forward.

"We understand that Giant granted a co-ownership right to Sunbelt concerning an earlier version of the product. [But] that right does not constrain either party from innovating and developing new products that are based on that earlier version," Carroll said.

She confirmed that Giants deal with Sunbelt covered signature updates "for the period of the agreement." Carroll declined to discuss the terms or length of the Giant-Sunbelt deal.

In a statement issued late Friday, Microsoft said it would deliver spyware signature updates under the pre-existing Sunbelt/Giant partnership through July 2007.

"[A]ny product offerings that Microsoft may subsequently deliver based on Giant technology will be owned solely by Microsoft, and in no way will be co-owned by any third party," the statement read.

Microsoft has already outlined plans for a standalone beta for Windows 2000 and later versions, and Carroll made it clear it would be a "new application," a strong hint that Microsoft would not be obligated to provide updates to Sunbelt.

"The Sunbelt co-ownership is around existing code. As we go forward with our own product, we will continue to provide them with signatures to keep that code up to date," Carroll added. "Our beta will be an entirely different product."

But thats not how Sunbelts Eckelberry sees his companys rights going forward. "We co-own all future definitions," he insisted, adding that the company plans to ship its Counterspy consumer offering as a free product to compete with Microsofts beta offering.

While Microsofts product will be free through the beta period, the company has dropped hints that it plans to charge for a final version. Analysts believe Redmond will ship a combined product marrying technologies from Giant and GeCAD, an anti-virus specialist it acquired in 2003.

Gartner vice president John Pescatore predicted that Microsoft will maintain a free consumer offering alongside a paid version for enterprises.

Such a move would put Microsoft in direct competition with startups such as Sunbelt and Webroot and with more established players such as Computer Associates, McAfee, Symantec and Trend Micro.


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