Intertrust Ahead in Digital Racket Management Patent Fight

(Forwarded from Boing Boing Blog.  Article text pasted below.  -- Seth)

-------- Original Message --------
Subject: [Boing Boing Blog] MSFT DRM infringes on Sony/Philips DRM
   Date: Wed, 16 Jul 2003 10:09:19 -0700
   From: "Cory Doctorow" <[email protected]>
     To: [email protected]


A US District Court has issued a preliminary ruling on the patent dispute
between Intertrust and Microsoft. Intertrust is a DRM company that was
all-but-insolvent when it was acquired for nearly half a billion dollars by
Sony and Philips last  year -- money that was a tangible vote of confidence
for its patent claims, which were in competition with claims from
ContentGuard, a company that Microsoft had made an enormous investment in,
in order to acquire its patents.

Now the courts are leaning toward Intertrust, which is bad news for DRM. 
ContentGuard's XrML is the basis of an ongoing standards-setting effort at
OASIS (I'm part of it), has been incorporated (in part) into MPEG4, and
forms the basis for the rights-signalling in Office 11, Longhorn, and
the-system-formerly-known-as-Palladium. 

I've no doubt that these giants will work out some kind of solution,
eventually, involving lots of quid pro quo and cash changing hands between
MSFT and Sony/Philips, but for now, this means significant instability in a
number of really  advanced, potentially deadly DRM efforts around the world.

Link:
http://www.latimes.com/technology/la-fi-patent16jul16,1,1846497.story?coll=la-headlines-technology
Discuss: http://www.quicktopic.com/boing/H/DvMYCjbVryDj
(Thanks, Jason!)

--
Posted by Cory Doctorow to Boing Boing Blog at 7/16/2003 10:09:18 AM

----

> http://www.latimes.com/technology/la-fi-patent16jul16,1,1846497.story?coll=la-headlines-technology


Ruling Boosts InterTrust Claims

By Jon Healey, Times Staff Writer
July 16, 2003


Judge accepts the firm's definitions in a patent suit against Microsoft.
Decision could make it easier to prove the case.


A federal judge has given a significant boost to InterTrust Technology
Corp.'s patent infringement claims against Microsoft Corp., accepting
InterTrust's definitions of critical terminology and chastising Microsoft
for failing to substantiate many of its arguments.

The two companies compete in the market for anti-piracy technology — in
particular, software to protect digital music, movies and other goods
delivered electronically. But with Microsoft winning far more customers for
its digital-rights management tools, Santa Clara, Calif.-based InterTrust
has shifted its focus to licensing and enforcing its patents.

U.S. District Judge Saundra Brown Armstrong issued a preliminary ruling July
3, interpreting 31 terms and phrases from 12 representative claims within
the InterTrust patents. She defined each term as InterTrust had proposed
with little or no alteration, effectively giving those claims the broad
reach sought by InterTrust.

The judge has yet to decide whether InterTrust's 11 patents were violated by
Microsoft's products, including its recent operating systems, productivity
programs, digital media player and Xbox game console. But two independent
patent attorneys said her ruling could make it easier for InterTrust to
prove its case.

"This was pretty much a clean sweep for InterTrust," lawyer David Hayes
said. "I think that's going to put quite a bit of pressure on Microsoft to
do one of two things: either appeal or go into serious compromise
negotiations."

Added lawyer Bruce Sunstein, "There's still a long ways to go, but this puts
the wind behind InterTrust for sure. There's no doubt about that. It makes
it possible for InterTrust to go forward with much more confidence."

Microsoft spokesman Jim Desler responded, "We continue to believe that
InterTrust's claims are very broad, and their pursuit of these claims is
more a result of unsuccessful product development and business plan than
based on the merits."

Armstrong cited Microsoft's attorneys' "persistent failure" to support their
arguments with evidence and legal precedents and threatened them with
sanctions. 

"The court will not tolerate a party's creating a dispute by taking a
position on a material issue where that party does not have a good-faith
basis for that position that is well-supported by fact and by law," she
wrote. 

InterTrust was bought for $453 million in November by Fidelio Acquisition
Co., a venture launched by Sony Corp., Royal Philips Electronics and
Stephens Acquisition. 

-- 

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