InterTrust Says It Owns DRM, Sues Microsoft 213
Rinisari writes "Fortune.com has a story about Santa Clara-based InterTrust Technologies is claiming that their suite of 26 issued patents and 85 pending patents covers digital rights management technology currently in use by Microsoft. InterTrust is seeking an injunction barring distribution of about 85% of Microsoft's product line, including WindowsXP, OfficeXP, and Xbox. Slashdot previously mentioned InterTrust when Sony and Philips announced they were attempting to buy ( and still are attempting to buy) the DRM outfit."
not sure who to cheer for... (Score:3)
or
Intertrust for stupid DRM?
Re:not sure who to cheer for... (Score:4, Interesting)
There's nothing stupid about Intertrust's DRM designs. They're intended to protect the rights of the licensee just as much as the rights of the licensor. I wrote some pretty lengthy posts about this in the last Intertrust thread; if you're interested in knowing more, I'd suggest you go back and read them and the surrounding discussion for more information.
And if you're not interested in knowing more, I'd suggest, respectfully, that you not call it "stupid DRM."
Re:not sure who to cheer for... (Score:4, Insightful)
There is everything stupid about them. One of their 26 patents is 500 pages and lists clsoe to 1500 claims, or was it 2000? The text showed every sign of having been produced using an automated tool.
The field of DRM long predates Intertrust and their patents.
At this point the company is down to a bunch of lawyers and they have staked the entire company on the Microsoft suit. They don't have any engineering at this point, it is pure patent exploitation.
WHEN RAT MONKEYS ATTACK (Score:2)
Re:not sure who to cheer for... (Score:3, Insightful)
How exactly, does the fact of a large patent with many claims indicate that the patent is "stupid," whatever you mean by that? What possible implication are we to draw from "the text showed every sign of having been produced using an automated tool?" That a computer filed the application?
Clearly it is ludicrous to dispute whether or not a given patent is "stupid," the term has no precise meaning that can be proved or disproved. Accordingly, I won't join that debate except to note that the validity and enforceability of the patent is not implicated or even seriously challenged by any of these issues.
It is meaningless, therefore, to whine about a patent being "stupid." It is certainly meaningless to whine about being "stupid" for such reasons.
The field of DRM long predates Intertrust and their patents.
Better, as this suggests some appreciation of the notion of patent validity being related to prior art. However, this criticism ias stated is likewise meaningless, for it is true of virtually every valid patent that ever issued -- the "field of" the subject matter of a patent has nothing to do with the validity of its particular claims.
The question isn't whether a prior field or reference reads on (that is to say, encompasses) a patent claim, but to the contrary, whether the patent claim reads on a particular reference. While the field of chairs may have long pre-existed the invention of a rocking chair, the rocking chair may nevertheless be patentable by a properly differentiated claim.
If Zeinfeld disdains any particular one of the 1500 claims he considers stupid, a more particularized argument might be to identify the specific reference that he claims antedates the patent, and to point out that each and every limitation of the claim appears in that reference. Otherwise, he is simply spitting into the wind.
At this point the company is down to a bunch of lawyers and they have staked the entire company on the Microsoft suit. They don't have any engineering at this point, it is pure patent exploitation.
Define patent exploitation. (Or is it simply synonymous with "stupid"?) Certainly, the fact that the company might not have any engineers has nothing to do with whether the patent is enforceable against Microsoft. Indeed, Microsoft is NOTORIOUS for waiting out smaller companies, ignoring their IP and fighting a patent suit until the company has gone bankrupt. (The STAC case, which Microsoft ultimately lost to the tune of $100M is a case in point.) Indeed, in identifying who was the patent exploiter in STAC, a judge and jury found it was Microsoft, not the shell that remained of a formerly vital company when Microsoft was done beating on them.
It is not uncommon that a small company or individual inventor gets ignored, and defenders of the industry puff about "patent exploitation" by a non-practicing inventor or his successors-in-interest. It takes BIG bucks to assert a patent claim against a real, collectible company, often way more than any company might have. It is not uncommon that the assets end up in a corporation formed solely for the purpose of obtaining a judgment -- not because the new corporation is the patent exploiter, but because the corporation owned property that was exploited by the defendant.
It might certainly be the case that this plaintiff is overreaching with awful or invalid patents. It might certainly be the case that Microsoft simply has been thumbing its nose at a smaller company. But this critic simply hasn't made his case with the facts he asserts here.
Re:not sure who to cheer for... (Score:2)
The Xerox patents predate the Intertrust ones and they describe the essentials you need. As for having to disprove each and every one of the 1500 claims before having standing to dispute Intertrust, that position is so stupid that you can only be a shill for them.
Filing claims says nothing about their validity. I don't believe for a minute that the USPTO examiner actually read them all before giving them the rubber stamp.
If you actually have a real invention you don't need 1500 claims. It is like Saddam's 12,000 page treatise on his weapons, if he wasn't up to no good he would not need to say so much.
Intertrust may have some valid claims, I doubt they are interesting ones. Their main obsession was with developing eight ways from Sunday to exploit the consumer. Under the InterTrust scheme they would sell the music track for $15, then charge another $20 for the video and have sidebars open up to cross sell the T shirt, the mug etc. There is a reason why the RIAA and MPAA showed them the door.
Re:not sure who to cheer for... (Score:2)
When I worked at the NRC [nrc-cnrc.gc.ca], we were developing some software that tried to find holes in a knowledge-base. We once discussed the scenario of creating something good enough that it could find patentable ideas, and then just letting it run and generate IP for the NRC.
Of course, we never got that far..:-)
-Rob
Re:not sure who to cheer for... (Score:3, Insightful)
Rule of law! Rule of law! Go, team!
I do agree. DRM doesn't hurt people, people hurt people. Although technically there must be such a thing as "stupid DRM," as in DRM easily subverted.
It's quite something to hear of Microsoft disrespecting the intellectual property of others. Something routine, that is. Maybe IP isn't all bad, hmm?
Time to get out in the sunshine....
Re:not sure who to cheer for... (Score:4, Informative)
I, and others worked for over a year with the intertrust SDKs, it never worked. Despite having Nguyen come over and try to tell us it did work, along with the tech monkeys, and dealing hand in hand with the EU intertrust teams (including the fools that left a certain development house to join intertrust), it still never worked.
The WMA packaging didn't work. The promised email DRM didn't arrive. The Office documents DRM didn't arrive.
InterTrust produced nothing but vapourware and overly broad patents.
Re:not sure who to cheer for... (Score:2, Insightful)
Re:not sure who to cheer for... (Score:5, Funny)
I'd love to be an IP lawyer. That way I could indulge my love of money and hatred for mankind in one easy step.
Re:not sure who to cheer for... (Score:5, Insightful)
Prediction (Score:2, Interesting)
This would be a Good Thing (tm).
Very Bad NEWS FOR LINUX: No GNU DRM (Score:2)
then where will this leave the linux desktop and GNU. Certainly GNU will not be able to liscence the DRM codes. Re-inventing them will be illegal. Even downloading them will be illegal, like DeCSS.
the only solution will be for commercially liscenced media players for the linux desktop. Probably made by MS or liscened by them (assuming as suggested in the article, MS will get the PC slice and sony will take the set-top slice.)
of course MS thinks Linux and GNU with its GPL are cancer. They have never made office for Linux. Why would they make DRM code for linux avaialble. Without the ability to play media the linux desktop future is dead or atleast a niche. Even servers, which might need DRM for say banking or other confidential data, or for government docs protected by DRM, will be dead if they cant do DRM
so the way i see this playing out is microsoft fights the patent. Nothig to loose. then they pony up 200 million to buy a third of the company from phillip and Sony (that's the same amount they offered before.). It will be an offer sony/phillips cant refuse. (in the corelone sense of the term). then MS uses it to enforce its PC hegemony and in particular kill GNU and Lnuix
Re:Very Bad NEWS FOR LINUX: Not necessarily (Score:2)
The other option is that the pieces of GNU/Linux which currently work without DRM will continue to do so, and any parts that require DRM in the future will simply be restricted to the retail market, just as many Linux distros contain packages (e.g. SO) that are retail-only.
Re:Linux DRM == Betamax (Score:2)
Except for a few things:
1)Software patents are currently not allowed in the EU, and are effectively unenforceable in the Third World. This means that regardless of whether DRM is owned by InterTrust or Microsoft in the US, competing implementations of can legally proceed in the rest of the world. American home users of Linux distros will easily be able to download DRM patches from EU servers if and when the time comes. Businesses won't be able to totally skirt the law, but nevertheless, the widespread existence of free, illegal packages will exert a downward pressure on the price of legal packages and should keep them within reason.
2)Linux isn't going away. It's being increasingly used by governments outside of the US. InterTrust can either play along and offer to license their own version of it, or they can find themselves locked out of foreign markets as the international community converges on a non-American standard.
3)MS in any case won't be able to prevent other operating systems from using DRM even within the US. This would certainly run afaul of antitrust laws.
How ironic (Score:5, Funny)
Wouldn't this whole thing (Score:2)
Now if only the judges, lawyers and everyone involved on both sides would be charged under the DMCA...
Congratulations! (Score:4, Funny)
Re:How ironic (Score:2)
Good update on this... (Score:2, Informative)
Re:Good update on this... (Score:2)
Already /.'ed (Score:4, Informative)
Maybe not. But his company's patent suit is the biggest legal threat to Microsoft since the antitrust case.
FORTUNE
Tuesday, December 17, 2002
By Roger Parloff
Imagine you had a nickel for every compact disc that's ever been made. The patent holders of the CD technology do have nearly all those nickels. Sony Corp. of America and Royal Philips Electronics get 3 cents for every CD manufactured, plus 3% of the price of every CD player sold.
That's a pretty good revenue stream--several hundred million dollars annually--as is the one that flows to the ten companies that hold the key patents on the DVD. Even the subversive, intangible MP3--that symbol of piracy triumphant--generates money for its patent holders; Thomson Multimedia and the Fraunhofer Institute of Erlangen, Germany, split 75 cents per MP3 player and $3.50 to $5.00 per ripping device.
Now there's a new set of technologies whose royalty stream may eventually swamp those of all its forebears: the so-called trusted systems and digital rights management (DRM) technologies that enable secure transmission of valuable files--audio, video, or text--across digital networks. Thanks to Napster and its ilk, the recording industry and Hollywood have endured a crash course in the importance of DRM. But DRM's potential applications extend far beyond consumer media. Such technologies may eventually be crucial, for instance, to the financial services industry, the health-care sector, law firms, and come to think of it, any company that wants to be able to send proprietary or confidential information over digital networks without worrying that it will wind up posted on YourCompanySucks.com.
Now imagine that one company holds the key patents to the whole shebang--not just methods to secure music and movies, but the entire spectrum of digital commerce. Imagine that revenue stream.
A small Santa Clara, Calif., company called InterTrust Technologies maintains that it is, in fact, that company. Though there are those who dispute this claim, InterTrust has some awfully big players convinced, including consumer electronics giants Sony and Philips. Indeed, in November, the two companies offered to buy InterTrust for $453 million in cash; as FORTUNE goes to press, they are in the process of trying to close the acquisition.
In its current incarnation, InterTrust consists of 39 employees and a patent portfolio: 26 issued patents and about 85 more pending, all in the fields of DRM and trusted systems. InterTrust also has one other asset of note: a suit against Microsoft that appears to be the highest-stakes patent litigation in history. The suit's charges give a good feel for the scope and breadth of InterTrust's patents, at least as InterTrust sees it. The company says its patents are being infringed every time Microsoft ships its Windows XP operating system; Office XP suite; Word 2002 word processor; Excel 2002 spreadsheet; Outlook 2002 e-mail client; PowerPoint 2002 slide presentation software; Windows Media Player; Xbox videogame console; Microsoft software for servers, mobile phones, pocket computers, and consumer electronics devices; and many of the components and tool kits that Microsoft now markets in connection with its most cutting-edge "bet the company" initiative: the networked computing and web-services platform known as
Since the acquisition is pending, neither Sony nor Philips will comment on the suit. Their only officially disclosed plan, expressed in a Nov. 13 press release, is to make "InterTrust's important DRM patents
But many observers think the consumer electronics giants are purchasing more than just a potential revenue stream. Rather, the companies may be acquiring what the feds failed to get via their sputtering antitrust suit: a Microsoft containment strategy. Microsoft's critics complain that the company is now leveraging its monopoly PC operating system to gain an advantage in the software markets for servers, set-top boxes, mobile phones, handheld devices, and consumer electronics devices--all of which are becoming more "intelligent," linked, and convergent with computers. InterTrust's patent portfolio may give Sony and Philips the hammer they need to beat back Microsoft. "I'd look to see a trade," says one security solutions vendor. "It could be as simple as 'Microsoft, you stay out of consumer electronics. You can have the PC.' That scale of trade."
InterTrust is the brainchild of a mad-scientist type named Victor Shear, who founded the company and is still its chairman. The son of a renowned cancer researcher, Shear, 55, aspired to achievements that not only would be personally remunerative but would also advance civilization. "Victor grew up in an environment," says one InterTrust executive, "where you don't come home unless you've put a satellite in orbit or something." (Citing legal advice prompted by the pending acquisition, Shear declined to be interviewed.)
"Victor Shear is without question the most fascinating man I've ever met in my life," says one dissatisfied yet mesmerized customer of a software product InterTrust marketed in the mid-1990s. "He's passionate, knowledgeable, and incredibly determined," the customer continues. "Those were his best and worst qualities."
Equipped with only a BA in sociology, Shear is almost entirely self-taught in the realm of technology. In 1990, when commerce over the Internet was still illegal--the National Science Foundation lifted the ban the following year--Shear founded InterTrust with the extravagant aim of inventing core technologies that would enable "technology-mediated commerce," as he put it. He envisioned a world in which most commercial transactions would be conducted electronically between a wide variety of hardware and software devices that would interact, for instance, via telephone modem connections to proprietary servers (which were already common) and perhaps eventually the Internet. These hardware devices and the software within them would all require ways of assuring themselves that they could "trust" one another to handle valuable digital property in accordance with predictable rules.
The key problem was how to provide persistent protection to digital files. If Jack wanted to send Jill a privileged legal document or a copyrighted movie, encryption would protect the file from being intercepted and read en route. But it did nothing to stop Jill, once she had the file, from making a million perfect digital copies of it and distributing them all over the globe. To prevent that one had to wrap the file in a secure digital container and tag it with rules describing how it could be used, such as: You may open this file only if you show proper authorization, or pay $1.99 to a clearinghouse; You may open this file X number of times or for Y number of days; and so on. To play or read the encrypted file, recipients would need special software or hardware that could be trusted by the content originator to enforce the rules. (Xerox's Palo Alto Research Center and IBM were developing similar schemes at the same time.)
Shear believed DRM would empower both producers and consumers by unleashing an array of new commercial relationships that had hitherto been impossible. "He never let us forget," recalls one former employee, "that we were not 'protecting music,' but 'developing the basis for a civil society in cyberspace.' "
David Van Wie, who became Shear's collaborator in the InterTrust venture in early 1991, says that while Shear and he wanted to market a software product eventually, they understood that they first needed to develop a bulletproof patent portfolio. "It would be a backstop if we weren't successful with technology development," he explains. The patents--which would encompass both software and hardware solutions to the problems--would give the young company a potential source of revenue via licensing.
On Feb. 13, 1995, Shear filed a behemoth, 1,000-page patent application, referred to in-house as the "Big Book." It incorporated InterTrust's sprawling vision of a method for conducting electronic commerce securely. Even that was really just the first installment of Shear's vision; for years afterward, InterTrust filed periodic supplements to the Big Book as well as entirely new patent applications.
With the patent application in place, Shear then turned to the business of producing an actual product: a software tool kit to be known as the Commerce Architecture. The tools would include software to package valuable digital content; server software to keep track of validations and authorizations; clearinghouse software to accept customer payments, track usage, and pay rights holders; and software to sit on end users' PC desktops and let them open secure files.
As early as October 1995, the company announced Commerce's imminent release. Top-tier clients lined up, including Universal Music Group, Bertelsmann, National Westminster Bank, Mitsubishi, and Reciprocal, a now defunct DRM clearinghouse that had contracts with clients like Sony Music Entertainment and McGraw-Hill. But while prototypes and components of the Commerce product emerged, InterTrust did not provide its customers with a usable, complete software tool kit for three more years--and even then customers still had to design their own applications.
Having paid, in some instances, millions of dollars in fees, customers were understandably peeved. Says one: "Victor's attitude was 'Look, this is going to be the best technology ever created in the history of man, so be a good boy and wait.' "
Even without releasing a product, InterTrust awakened the sleeping giant. In 1997 officials from Microsoft's electronic commerce division held their first tentative meetings with InterTrust officials. By the end of 1998 the companies were locked in serious negotiations over a variety of possible relationships. Negotiations continued into 1999, when in April the U.S. Patent and Trademark Office granted the first in a string of patents based on the Big Book. Intense talks proceeded through that summer. Evidently anticipating an alliance, chief Microsoft negotiator Will Poole gushed to the Wall Street Journal: "InterTrust is solving problems that won't be in the mainstream for quite some time. It's visionary."
Today Poole is Microsoft's vice president for the Windows new-media platform division. Looking back on that statement, he says, "I think it's fair to say I was at times an outspoken advocate of working with them and finding ways to come up with a win-win deal, even when others, internally, weren't sure it made sense.
"Their view was that their system would effectively be the backbone fabric of all e-commerce transactions," he adds. "One could not help but be impressed with the scope of that vision. But dreams without implementation are fairly easy to come by, particularly in the software industry."
In the summer of 1999 the parties were discussing the possibility of Microsoft's paying InterTrust about $140 million for a 20% stake in the company--plus a commitment to begin shipping the company's software in every copy of Windows starting in 2002, according to a former InterTrust executive. But the deal never happened. "InterTrust passed on an opportunity better than any deal I've seen Microsoft do," says this former official, who believes the company succumbed to the "hubris" of the times. InterTrust strongly denies walking away from that deal.
At the time, of course, the tech bubble was still inflating, and InterTrust was poised to go public. Its October 1999 IPO raised $123.4 million; six months later it fetched $92.2 million more in a secondary offering. The stock, which opened at $9 a share, peaked at $97 in February 2000. InterTrust expanded to 376 people.
You can guess what happened next. By August 2001 the stock was under $1. In early 2000, as InterTrust's market cap began vanishing, Microsoft launched its
Because Microsoft provides software tools to developers, the company extensively documents the way its products work. "That's a good thing for Microsoft's customers," explains David Maher, InterTrust's chief technology officer, "but it has also enabled us, frankly, to pretty clearly see that they're infringing."
Maher speaks in measured, deliberate sentences. Before coming to InterTrust, Maher--who has a Ph.D. in mathematics--was a research engineer at Bell Labs, where he was the principal designer of the secure telephones used by U.S. military and intelligence and high-level government officials, including the President.
InterTrust does not believe that all DRM products necessarily infringe its patents. "There are lots of noninfringing security capabilities out there," Maher says--including DRM techniques. "There's a difference between how we do things and how IBM did, or how Xerox did," he adds. "Microsoft picked the way we did it. How and why, I'm not going to conjecture." So in April 2001, InterTrust sued Microsoft.
Brad Smith, who became Microsoft's general counsel this past July, groups the InterTrust case with nearly two dozen other patent cases his deep-pocketed employer has been hit with in recent years. He attributes them at least in part to the bursting of the bubble. "There were a number of businesses that had interesting and at times even valuable ideas," says Smith, "but business models that were either not likely to succeed or at a minimum were ahead of their times." Projecting the kinder, gentler face of post-antitrust-suit Microsoft, Smith continues, "In some cases, there was just an unrealistic expectation about the return that would come from IP rights. InterTrust might be--might be--one example of that." Certainly Microsoft's recent patent litigation track record tends to support Smith's point: Since 1994, when it lost a $120 million verdict, the company has won nine straight patent cases litigated to conclusion. And it's won three more judgments now on appeal.
But the InterTrust case differs from those other suits both in scope and, more important, staying power. Most of those other actions have been brought by struggling, tiny companies or even by individual inventors. In contrast, InterTrust today has $125 million in cash--and it's not going to run out anytime soon. In April 2002, with the market for DRM products still nascent, InterTrust stopped selling its products and became a pure intellectual-property company, paring its workforce down to 39 and its quarterly burn rate to just over $4 million.
A month later Sony licensed InterTrust's patents, agreeing to pay an up-front fee of $28.5 million, as well as royalties. The patents are pertinent, for instance, to Sony's branded line of DRM-protected audio and video players, as well as memory sticks and software for handheld devices, all of which look forward to a day when the record labels and Hollywood will widely release their wares in DRM-protected formats. This deal gave InterTrust the first profitable quarter of its life and represented a major vote of confidence in the importance and validity of its patent portfolio.
At the nitty-gritty level, Microsoft's defense against the patent suit is twofold: Its products do not infringe, and even if they did, InterTrust's patents are invalid. Poole emphasizes that the engineers who developed Microsoft's DRM products never saw InterTrust's. InterTrust did permit two Microsoft engineers, under a nondisclosure agreement, to spend a day looking at InterTrust's technology to try to verify that InterTrust really had what it claimed, Poole says. But these reviewing engineers were cordoned off from those who actually design and build Microsoft's products and were provided very limited information from InterTrust anyway, according to Poole.
In fact, InterTrust's secrecy was at times "surreal," Poole claims. "We were talking about making investments of millions of dollars in a private company where I personally, as sponsor of the investment, had never ever seen their product operating. I imagined myself at the time sitting in a review with Bill Gates and saying, 'Well, Bill, I haven't seen it but, trust me, Victor says it's good.' "
Poole's account does not dispel the possibility of patent infringement, however. One can infringe unintentionally; willfulness only increases the damages. And of course InterTrust executives insist Microsoft's infringement was nothing if not willful. "I don't think there's anything inadvertent about this case whatsoever," says InterTrust executive vice president Patrick Nguyen, one of the negotiators. "When we first talked to them, they had not done anything--or even thought about DRM or trust," he contends. "We spent a fair amount of time with them educating them."
As for Microsoft's challenges to the validity of InterTrust's patents, they are premised on their alleged indefiniteness, obviousness, and lack of innovation. Even outside Redmond there is some skepticism about the InterTrust patents among rival DRM researchers. During the early 1990s, if not earlier, researchers were grappling with similar problems at IBM and Xerox and at universities both here and in Japan. If any of them came across the same solutions that InterTrust later patented, those particular claims would be invalidated due to "prior art."
But until a judge and jury trudge through the tedious task of comparing InterTrust's patents, claim by claim, with a slew of "prior art" contestants and then with the inner workings of dozens of Microsoft products, no one knows if InterTrust's patents will hold up.
And even if InterTrust's chances of winning were slight, its leverage would still be enormous. "I just don't see how a company the size of Microsoft can take the risk of having this go to trial and suffering the potential consequences," says Nguyen. "We have 144 claims. All it takes is one claim to prevail."
"I think you could think of each of these claims as a nuclear warhead," adds Mark Scadina, InterTrust's vice president and general counsel. "So if ten of these get through, it would be disastrous from the defendant's perspective."
Which brings us back to Sony and Philips. Assuming their acquisition of InterTrust is finalized, they will have to decide how to proceed with this extraordinary suit--which, aside from the patent portfolio, is nearly all that remains of InterTrust.
The new owners need to decide soon, since the case is headed toward a crucial hearing in May, where U.S. District Judge Saundra Armstrong will define key patent terms. Since broad definitions often foreshadow a plaintiff's victory while narrow ones presage defeat, it is a pivotal event.
Some observers think that Sony and Philips, which have existing business relationships with Microsoft, will quickly settle, giving each side peace of mind: assurance for Microsoft that its business won't be shut down, and assurance for Sony and Philips that the guts of their brand-new patent portfolio won't be judicially nullified.
But others can't believe these companies would have spent a half-billion dollars on an unproven patent portfolio if licensing were their only goal. They see the patents as weapons for defending turf in a convergent universe--one in which the functions of TVs and audio players and computers will increasingly overlap.
"Philips and Sony don't want to be disintermediated from their customers the way PC manufacturers were," asserts one longtime DRM industry participant. "They may have found a very efficient bargaining leverage with the InterTrust IP.... This is the core of what all this is about."
It's a remarkably high-stakes battle over a market that doesn't exist yet. No company, including Microsoft, is yet making money with its DRM products. The long-anticipated "early adopters"--the recording industry and Hollywood--are still only testing the waters. There are persistent doubts about whether DRM products will ever be able to ward off hackers or win consumer acceptance. No one has yet figured out how secure music or video will compete successfully against their free counterparts, which abound on peer-to-peer sharing bazaars.
Nevertheless, Microsoft and InterTrust have each put hundreds of millions of dollars behind their belief that the logjam will be broken, and Sony and Philips are now adding a half-billion dollars of their own to that pot.
Microsoft general counsel Brad Smith claims that DRM is already beginning to find its market. "There are seven music and video subscription services today using Windows DRM," he says. "Our DRM technology has empowered more than 11 million transactions to date in terms of actual acquisition of content-protected music and the like." In fact, when Smith gets rolling on the subject of DRM, he sounds like no one as much as InterTrust founder Shear--albeit a polished, down-to-earth version. Smith stresses that the future of DRM will extend far beyond the protection of entertainment-based content. It will be used, for example, "to protect medical records, and financial data, and corporate information, and legal and business documents, and the like," he says.
InterTrust and Microsoft clearly agree that DRM will eventually succeed in enabling businesses to assert ownership over any type of digital property. The only question then will be, Who will own DRM?
Re:Already /.'ed (Score:2)
Another interesting thing to wonder about is, "how long until the patents expire?" If they were first invented in a quite different context, then they might expire more quickly than one might hope/fear. Still, I doubt that they could be older than 10 years (if the filing date was 1995, when was the invention date? or is it the filing date that's important?), so there's at least 7 years of life in the concept... Is that good or bad? Making DRM expensive might limit the uses to places where it's really appropriate. But it might just make things more expensive.
Everything to gain? (Score:2, Interesting)
Re:Everything to gain? (Score:5, Insightful)
Re:Everything to gain? (Score:3, Insightful)
Re:Everything to gain? (Score:2)
Re:Everything to gain? (Score:2)
Not really. They have to wait for MS to infringe before they can sue for infringment.
Re:Everything to gain? (Score:2, Interesting)
NB if you own a Windows box w/Media Player 8 do a search for InterTrust *wilful infringement is a high probability IMO*.
Dammned if you Do, Dammned if you don't (Score:4, Funny)
If the other guys wins, M$ will buy them and then end fair use as we know it period.
w00t?
Re:Dammned if you Do, Dammned if you don't (Score:5, Interesting)
1) InterTrust wins, and wins big. Maybe they then get bought out by Sony and Philips, maybe not; either way, Microsoft has to pay some huge amount of money (and maybe continuous royalties) to someone else -- or scrap years of work on their products and start over. Bad for Microsoft == good for pretty much everyone else in the world. And Microsoft can't just buy InterTrust because they've spent so much damn money paying off the settlement, and/or Sony and Philips (which between them can probably outspend even Billy-boy) throw in their money to keep it from happening.
2) InterTrust loses, and loses hard enough to set a precedent against questionable patents. Although this would be good for Microsoft in the short term, it might be good for everyone in the long term by establishing the precedent that ideas aren't patentable, only implementations, which is the way it should be all along. Unfortunately the article doesn't go into enough detail to judge whether that's a possible outcome, but if it did happen, it would be a Good Thing.
3) The case stalemates (probably because, as in the anti-trust case, Microsoft is clearly guilty, but their money and name recognition keep the case in endless appeals) and Sony and Microsoft end up fighting a years-long war with Intertrust as the proxy. Meanwhile, Philips dissasociates itself from the case and starts working with more consumer-friendly companies
(2), which would probably be the most useful in the long term, is also IMO the least likely. But (1) and (3) seem like real possibilities.
Comment removed (Score:5, Insightful)
Re:Dammned if you Do, Dammned if you don't (Score:2)
I dunno, I find these companies who go around doing nothing but filing patents to be the most absurd abuses of the patent system. The festo case is a perfect example of this, where someone will just patent everything under the sun and make changes to the patent to accomodate how the tech is actually being used.
Re:Dammned if you Do, Dammned if you don't (Score:2)
How and why? Bad for Microsoft = Good for however go their money, and that certainly excludes most of us reading slashdot. Or they will charge less for the preloaded mandatory, warranty attached laptops or computers I use to buy?
The end result is my money goes to Microsoft even if I don't use their products, and in turn, that money goes to Sony or somebody else. Well, I can't see how much better I am after the "Bad for Microsoft".
On the other hand, "Linux = Good for Microsoft users" is the key here. They have less power to mandate everything because they can actually lose customers if they pull the rope too much. So all the Microsoftiers here and there should thank the competitors, NOT the sue happy lads.
Re:Dammned if you Do, Dammned if you don't (Score:2)
While I agree with your point, I quote the article:
The issue is not the idea of DRM, but rather the implementation MS used for their DRM-related products. Chances are, MS picked InterTrust's because they knew that IBM is too big to be bullied, as is Xerox, but Intertrust might be too small to put up a fight. That definitely needs stopping.
Judging from the article, InterTrust looks to be in the right on this one. We'll see how it turns out.
--Dan
Re:Dammned if you Do, Dammned if you don't (Score:2)
Is settle. These suits are brought to have a settlement offer. Microsoft can drag the case on for years while releasing products. They can claim that "Windows YO" has DRM built in, how can we possibly strip millions of consumers from using it, etc.
The case will settle within a year and things will go on as normal.
Re:Dammned if you Do, Dammned if you don't (Score:2)
Very Gutsy Move (Score:5, Insightful)
I wonder what makes them think they can pull it off.
Re:Very Gutsy Move (Score:2)
Uh, perhaps they're just looking for a payoff? Sure, the lawyers are probably bred in vats, but if this gets to court, some top execs could be called as witnesses, and that'll cost Microsoft money.
Re:Very Gutsy Move (Score:2)
Filing the lawsuit has very little downside for Intertrust and only upside. Even if the patents are invalidated during the case they have not lost much since nobody was licensing them in any case.
This is the same kind of 'courage' that is talked about when politicians send troops off to war. The risks taken by the men do not make the leader courageous. Whatever you argue about the 'courage' of the 9/11 suicide bombers, the guy who sent them was a rank coward who didn't even stay and fight.
Re:Very Gutsy Move (Score:2)
Perhaps they saw what a crappy job they did in the antitrust trial. For such an allegedly powerful legal team, they don't seem to have their act together at all. The only thing that saved them was the appearance of a more Microsoft-friendly execute branch.
Re:Very Gutsy Move (Score:2)
"Anybody who takes on one of the world's largest corporations (with probably the most high- paid lawyers on its payroll) and attempts to shut down 85% of their product line is very courageous indeed. I wonder what makes them think they can pull it off."
Eventually a person -- the judge -- looks at the issue and decides. And there is not an endless stream of appeals, though it may seem like it sometimes. But I think you can only throw so much money and litigation at something.
Politicians, however, are another story.
But then... (Score:3, Funny)
DRM? Definition: (Score:3, Informative)
InterTrust develops and licenses intellectual property for digital rights management (DRM), digital policy management (DPM), and trusted computing. We hold 26 U.S. patents and have approximately 90 patent applications pending worldwide. Our patent portfolio covers software and hardware techniques that can be implemented in a broad range of products that use DRM and trusted computing technologies, including digital media platforms and web services, and the enterprise infrastructure. Our research, engineering, and IP groups focus on development of next-generation technologies, invention protection, and licensing.
Locations and Employees
InterTrust is headquartered in Santa Clara, California, and the Company has 35 employees.
So 35 people and a pack of lawyers are taking on Micro$oft? Good luck brave souls.
Hmmm, how to interpret this? (Score:2)
I'll just stick with a quote from Bart Simpson:
" The ironing is delicious! "
Comment removed (Score:4, Insightful)
Re:Interesting indeed... (Score:3, Interesting)
Therefore the only reason people would buy blank media would be for their own backups.
graspee
Whew..... (Score:3, Funny)
I knew there was bound to be a period in there somewhere.
This is great! (Score:5, Interesting)
Plenty. (Score:2, Insightful)
Apple's already taken an anti-DRM stance, and DRM will never work on Linux simply because there's no way you can force it down the throats of your users.
Microsoft is alread paying royalties on plenty of stuff. You didn't think they came up with scandisk and defrag, did you?
Re:Plenty. (Score:2)
Maybe some royalties, but usually they just buy companies outright if they have something they want. Of course anything they have to pay will just get passed on to the customer anyway, since if Microsoft has to pay, EVERYONE has to pay.
Re:Plenty. (Score:2)
Same as fonts (Score:2)
This can only be good.... (Score:3)
Re:This can only be good.... (Score:2)
Microsoft is *sooooo* screwed... (Score:2)
Perchance to dream... (Score:2)
Wouldn't it be horribly ironic if a lawsuit like this brought down Microsoft - not necessarily completely, just its monopoly position - while the epic-length antitrust case hardly made a dent? I'm sure there would be quite a few Linux and Mac users dancing in the streets, as thousands of computer companies are forced to stop selling their systems simply because they run Windows.
I'd better stop now, before I let the thought get to my head.
Re:Perchance to dream... (Score:4, Insightful)
Now, it may hurt their Windows Media format being used by Hollywood-types since DRM was one of its selling points.
Re:Perchance to dream... (Score:2)
"If MS is forced to remove any and all DRM code, they'll just issue a hotfix that'll remove it."
hmm.. this is the same Microsoft that couldn't even imagine that a browser could be separated from an OS? that was unable to figure out which binaries were IE and which were OS?
Gee... so, if they'd be able to do it vis-a-vis DRM, but not web browsing... do ya think they weren't acting in good faith during the trial?
Linux has DRM! (Score:5, Funny)
chmod -R 000 *
Now microsoft owns your files, and not even they can read them!
Re:Linux has DRM! (Score:2)
Funny thing is, that's pretty much how thier DRM really does work =)
Re:Linux has DRM! (Score:2)
So, hang on, if the buyout happens... (Score:5, Interesting)
Remember back in the day when Sony fought like hell to make VCRs legal, saying consumers had a right to copy? At Sony Music, do they look back on those court cases and laugh?
Re:So, hang on, if the buyout happens... (Score:2)
I don't think that Sony was arguing for the right to copy and share, just the right to copy for yourself. There is a big difference between recording a TV program back then, and giving away your whole music collection now.
-BrentIs anyone else scared (Score:2, Offtopic)
This is InterTrusts MO, nothing new (Score:4, Insightful)
I expect them to sue: Microsoft, OpenTV, Liberate, PowerTV, Nagravision, NDS, Canal Plus, and just about anyone who has anything to do with conditional access if they haven't already.
You can thank overly broad patent protection that allows you to patent an idea (remember 1-click ordering), instead of forcing the patent holder to develop a product or implementation that actually utilizes the idea.
The only thing InterTrust has ever done is create a major payday for lawyers.
Re:This is InterTrusts MO, nothing new (Score:5, Interesting)
It never worked. So, like all internet boom companies that had ideas, but just vapourware, they are reduced to suing everyone in sight. This is one I want to see Microsoft win.
Re:This is InterTrusts MO, nothing new (Score:2)
Not a bad idea... get lots and lots of patents on technologies that could possibly be used to limit personal computing (like DRM) and just sue any violators (I'm sure MS would be in the crossfire more than a few times)
Re:This is InterTrusts MO, nothing new (Score:3, Informative)
Now that is a really silly point of view. Many companies and university research consortia are run as R&D operations whose sole goal is to develop a new patented technology. They make money by then selling the rights to the patent to a company that then proceeds to turn the invention into a product. We would miss out on a lot of new technology if we insisted the inventor make a product. Some companies do R&D really well, but don't want to get into the business of making products. Other companies are good at producing and selling stuff but can't do R&D. Your proposal would make for a lot of economic inefficiency and hurt the creative ways that are being used to develop new technologies, and bring them to market.
PRIOR ART FOUNDATION (Idea) (Score:4, Insightful)
run for your lives! (Score:3, Funny)
Clash of the Titans (Score:3, Insightful)
DRM as a business (Score:5, Interesting)
Actually, MS are salivating over DRM for an entirely different reason: they think business will pay them pots of cash for it.
Just imagine how good a "your documents can't be leaked, can't be stolen, changes can be tracked and you have total control over which employees see what" must sound. It'd make business confidentiality much easier. Pay-per-play is a lucrative area, but DRM has far wider uses than just that.
I've been told by MS execs that there is kind of an internal debate raging about whether micropayments or DRM is the way forward, but that DRM was winning because it could be commercialised and sold as a feature to business. They didn't seem to regard the content industry as the main target for it: individuals and organizations who wished to control their own business information were a big deal.
Re:DRM as a business (Score:4, Interesting)
Does Microsoft honestly expect to stay afloat in five years if their next move forward involves two strategies which royally piss off corporations and consumers alike?
Re:DRM as a business (Score:2)
Pissing off corporations? What a shock. Everyone is jealous. Pissing off consumers, they couldn't care less, because the people they're pissing off are such an insignificant percentage of the population. Most of the tech-savvy people aren't paying for any microsoft products now, so what's going to change if they go linux?
Re:DRM as a business (Score:2)
It's worked for them so far, who says the future will be any different? Tell me something that Microsoft has done that has not pissed off corporations and consumers? (For me personally, I can say Windows 2000, Visual Studio 6, and ODBC 3.0).
Re:DRM as a business (Score:2)
Just imagine how good a "your documents can't be leaked, can't be stolen, changes can be tracked and you have total control over which employees see what" must sound.
There is value in having control over who sees a document. If nothing else, you know that one of these people leaked the document. However, as has been stated many times before, the DRM will only work if the all machines respect the DRM. Right now one can track changes in a word document, but converting to text makes that tracking irrelevant. DRM is not going to protect against leaks to F Company [fuckedcompany.com], much less major news outlets.
OTOH
Anyone with half an ounce of technology smarts would know that simply encrypting sensitive digital documents would be DRM-enough. Who cares if you can copy a 512bit-encrypted PDF if you don't have the key to open it up?
I feel it necessary to cite Schneier's Fallacy of the Very Tall Pole. If you want to protect your property, build a fence, not a taller pole. WRT to your statement, the problem is a)it must be unencrypted to be read and b)you do care who has the encrypted document. First, the document must be unencrypted to be read. The encryption may help you identify the leak, but it won't stop the leak. DRM can help stop the leak by marking certain documents as not-to-be-printed or not-to-email-to-insecure-people, if all equipment respects these tags. Second, a lot of encryption can eventually be broken. If the information will expire in a few months, for instance a love letter, then that is not such a big deal. If the document desribes how you murdered your once true love, you certainly want to keep even the encrypted version under wraps.
Re:DRM as a business (Score:2)
Re:DRM as a business (Score:2)
In some cases in businesses (I'm thinking engineering-related stuff especially), being able to access documents at the right time may even be life-saving. For example, say you contract out someone to build a power station for you. If something goes wrong with the power station, then that could be a major problem if the DRM settings on your drawings are stuffed. Even in less extreme situations, someone sending you documents with bad DRM settings can render them useless at inopportune moments, with no prior warning. In my opinion, Microsoft is trying to create a far larger market for DRM technology than actually exists.
Hmmm, suprisingly (Score:2)
Another example of how patents can be bad (Score:2)
I often wonder if we're at the point today where patents hurt innovation more than they help it. Especially in the computer industry, do we really need a patent system?
How did Amazon's 1 click patent help society?
If patents aren't helping society, then they should be nixed. Copyright and patent systems are only useful so long as it benefits society. I believe firmly that copyright law benefits society, but I'm not so sure about patents anymore.
Re:Another example of how patents can be bad (Score:2)
InterTrust has several implementations that are part of currently shipping products from companies like HP and Nokia. They are not just an IP holding company. IMHO this is clearly a case of Microsoft trying to rip off a technology.
The outcome is already known (Score:2, Interesting)
Microsoft LOVES patents. They even love paying for them AT A VERY high price. It helps exclude the competition.
The outcome is already known, Microsoft will capitulate with InterTrust and will make it cost huge bucks. InterTrust then gets to yell "see, my patents stand up to scrutiny and they are really valuable" and nukes everyone else out of the DRM buisness by charging over the top for licencing fees.
Fortunately for us, DRM is a flawed concept and anyone who ever tries to get to close to it ends up paying with lost customers and diminsihed loyalty.
A paper by Carl Shapiro [berkeley.edu] discusses this argument better than my rant.
BTW - this practice is not exclusive to Microsoft.
DRM? (Score:2, Interesting)
Please remember that it's 'Digital Restrictions Management'.
Microsoft's reputation for borrowing ideas (Score:2, Interesting)
The most conspicuous was probably the Stac [byte.com] patent-infringement suit.
What these stories have in common is: first, it is probably not so much a case of Microsoft outright stealing technical details, but more "we like that general approach, this company has shown us that it works, let's do it that way ourselves." For every case of outright infringement, there are probably a dozen more of moral, but not legal theft of ideas.
Second, and more ominous, even in those cases like Stac where Microsoft was challenged in court and lost, in the long run it didn't matter. Stacker is a distant memory, Stac Electronics is all but forgotten, and their website [stac.com] isn't responding right now...
What we need.. (Score:3, Funny)
They're both evil, but... (Score:5, Informative)
There are a lot of comments stating that Intertrust had nothing more than a patent portfolio. As someone who ran Intertrust's product live on the internet for demos and trials, I can attest that that is not true. Intertrust provided SDKs to companies interested in DRM technology, and we had an in-house product showing one possible implementation. The product was real.
Second of all, this lawsuit has been in the works for years. I heard about it in mid-2000 when I worked there, so I wouldn't be surprised if they were working on this in 1999. From my understanding, it came about from ITRU's talks with Microsoft, which resulted in Microsoft putting out white papers on DRM technology that looked amazingly like ITRU's white papers, except with the ITRU logos replaced with Microsoft logos. Really. I expect a decision in ITRU's favor, which will be stuck in the appellate courts for approximately eternity.
Anyway, Microsoft is evil, and perhaps ITRU is evil if you don't like patents, but there are plenty of good uses for DRM (think medical records), and anytime someone can stick it to Microsoft, they should.
Cheers!
As an Intertrust user (Score:3, Interesting)
As an individual who was (un)fortunate enough to use some early products based on that Intertrust SDK, I can tell you that the system was a disaster. That is to say, it certainly worked well enough at protecting content... it just tended to protect it from legitimate users as well as unauthorized ones.
Of course, I can't even tell you if it really did protect content from unauthorized users, because the company kept such ultra-tight control of their product that real cracking attempts were all but impossible. I'm told that you had to install special physical security arrangements in an office before you could even get a look at the damned SDK. Not to mention a pile of NDAs and licenses that pretty much kept you from even trying to get it over 60mph (metaphorically speaking.)
As a company trying to produce a real, tangible product, Intertrust was a disaster. Whether their software could have eventually lived up to the hype we'll never know, because from their actions it appears that they had were either incompetent or were going out of their way to avoid producing a viable product. What they were really good at doing was convincing other companies-- sight unseen-- that they were the greatest thing since sliced bread. The companies who did eventually use their product all went in enthusiastic and raving, and came out indifferent.
From the enthusiasm of the companies out to buy them, it certainly looks like Intertrust haven't lost their touch at selling themselves. And from the effort they're throwing into this lawsuit, it sure looks like Intertrust wants to go into this deal with more than just their product (good idea, guys).
Microsoft :-P (Score:3, Insightful)
InterTrust is clearly the originator of DRM technologies. They have already implemented software products in a variety of devices such as MP3 players. Microsoft is clearly just trying to rip off a technology invented and developed by a much smaller company.
The Dance Begins (Score:4, Insightful)
I've Said It Before And I'll Say It Again... (Score:2)
Sue Microsoft? Hah! (Score:3, Insightful)
Like they wouldn't have the money to do THAT a few thousand times over?
Anyone who is going to go up against MS has to be doing it without ANY hope of financial gain, and a willingness to stay in court for as long as it takes (even years) before they give up trying. Somehow, I don't think Intertrust and their lawyers are going to be willing to play martyr.
Moral: don't play chicken with a bus.
Before we rejoice.. het another Tax on the user (Score:2, Insightful)
A little Christmas cheer... (Score:3, Funny)
Schadenfreude, schadenfreude
Isn't it so sweet?
Billy's such an asshole
It's so great to see him beat, oh!
Schadenfreude, schadenfreude
Will this show to them
Why our rights must not be
Bitchslapped down by DRM?
Sadly, it probably won't; M$ isn't known for being cowed by a taste of their own medicine. Nevertheless, maybe we'll actually see something good come out of this...
Feh. (Score:2, Insightful)
If Microsoft sells their flavor (or any flavor) of DRM to a content creator under the impression that it is 100% secure, they're flat out liars. All it takes is *one* person to crack the code, and release it over the 'net. Microsoft realizes they can't offer 100% security, I'm sure. Since they do realize this, they're going to tell their clients that their stab at DRM is better than no DRM at all, and companies are going to bite.. as they already are.
But it all comes down to this.
The instant people can't use their Windows computer to upload files to their MP3 player, a dangerous consumer backlash will occur. People won't buy the new flavor of Windows if it prevents them from ripping their own CDs, or if they find out they can't use Kazaa with it either.
Furthermore, nobody cares about WMA, which is a huge problem for Microsoft considering they NEED to use WMA for their DRM to work in the first place.
Truth is, consumers have already spoken. They want iPods, not the SDMI crap [openmg.com] that Sony put out and forces NetMD and MemoryStick players to use.
SDMI ~ Add a few O's and replace with I with a Y and it better represents what it attempts^Hed to achieve.
Re:Whaaaa? (Score:3, Insightful)
Patents are not about damages. If InterTrust's patents are confirmed, they have the monopoly to use the technology described in the patents.
If they don't allow Microsoft (or any other company) to use it, then Microsoft will have no other choice than to remove all this technology from their products.
Of course that's now what InterTrust wants, they just want one or 2 billion bucks from MS ;-)
Re:Whaaaa? (Score:2)
Their shit gets everywhere, and is a pain to extract. If we don't resist, we will pay eventually.
Re:A Possible Victory? (Score:2)
It is called Windows XP and Windows 2000 SP3
Re:About freakin' time! (Score:2)
You mean hard disk's drivers of unsuspecting public stop working; Windows no longer being able to access user's hard disk; user's no longer being able to access all the p0rn stored on those disks; ...?