Microsoft announced today that it has settled a 3-year-old InterTrust Technologies patent-infringement lawsuit for $440 million. Under terms of the agreement, InterTrust will receive rights to design and publish reference-technology specifications related to Digital Rights Management (DRM) and security, and Microsoft will have rights to a "comprehensive license" of InterTrust's patent portfolio. The settlement ends all litigation between the two companies.
The agreement comes at an important time for Microsoft, which is pushing its DRM technology to consumers, content providers, and enterprises. DRM digitally establishes a user's rights to purchased or subscriber-obtained digital content. For example, if you purchase a song from an online store, the file's DRM protection could determine whether you can burn the song to a blank CD, share it among other PCs, or listen to it on a portable audio device. DRM is key to the future of digital-content delivery, whether that content is an eBook, music, video, or sensitive corporate documents. InterTrust's patents specifically address antipiracy technology, which is a key component of DRM.
"Licensing InterTrust's patent portfolio reaffirms Microsoft's 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," Marshall Phelps, Microsoft's corporate vice president and deputy general counsel for intellectual property, said. "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. Doing an effective job at managing the IP in our software differentiates our products and builds confidence that Microsoft has the rights necessary to build innovative solutions."
InterTrust first sued Microsoft in April 2001 and briefly attempted to halt the distribution of Windows XP, which shipped later that year with integrated, DRM-enabled digital-media capabilities. At the time, InterTrust officials said that Microsoft pursued a $100 million investment in the company between 1998 and 2000, then mysteriously halted talks and released its own DRM technology that closely mirrored InterTrust's patented intellectual property.