If you thought several adult and mainstream Internet companies were having a patent litigation headache over streaming media, just have a gander at Microsoft's patent litigation problem - a claim it infringed a large enough pile of digital security patents, for its entire product line, that could cost the Redmond, Washington software empire billions, according to Fortune.
Microsoft lost a crucial pre-trial argument in federal court July 3, the magazine said, meaning a round of settlement talks as apparently agreed to by both sides before the hearing. It also means the likelihood that, though no figures were actually put on the suit, Microsoft's challenger isn't likely to settle "for any sum that does not have a B in it," or - if a settlement isn't reached - that Microsoft could have to yank a large volume of its products off the market until one is reached.
Microsoft's challenger is InterTrust Technologies, and the stakes could end up being billions out of Microsoft's pockets if they end up losing the entire case. "Microsoft argued in court that crucial phrases in InterTrust's patents were too vague to be enforceable, and that others required such narrow interpretation that they would have been hard for Microsoft to infringe," Fortune said. "But in her July 3 ruling, an Oakland judge resolved 33 of 33 disputed issues against Microsoft and rebuked the company's lawyers for wasting her time by promising proof that never materialized-legal vaporware, in essence."
The heart of the case is InterTrust's claim that its engineers developed and patented key inventions in digital-rights management and trusted systems, "essential to the digital distribution of copyrighted music and movies, and to maintaining the security of e-commerce in general," Fortune said. Formerly independent, marketing its own programs and products, the company was bought by an investment group led by Sony and Royal Philips Electronics in January "hoping to convince consumer electronics and tech companies...of the need to license its patents," the magazine added.
But don't think the Microsoft-InterTrust dispute compares to the dispute between several adult Internet companies and Acacia Media Technologies, says one of the leading lights in the latter dispute, Spike Goldberg of New Destiny/Homegrown Video. "The only similarity has to do with it's about patents," Goldberg said. "There's nothing wrong with patent law, and there's a reason why it's there, to protect invention. And this is more of an actual invention than a process such as what we're dealing with."
Goldberg's and other adult Internet companies are challenging Acacia's patent claim to various technologies critical to streaming media. Acacia filed a motion to amend their complaint against those companies, adding charges that all but add up to conspiracy, earlier this month. A hearing on that motion is scheduled in federal court August 4.
InterTrust maintains its inventions cover things Microsoft has melded into Windows XP, Office XP Suite, Windows Media Player, Xbox, and .NET network computing, among other Microsoft applications. And a failure to settle, Fortune said, could mean InterTrust prevailing in court and getting a court order to stop sales of all those products. "How much," InterTrust chief executive officer Talal Shamoon said to Fortune, "would that be worth to Microsoft?"
