Microsoft's Patent Problem

Fortune.com ^ | Tuesday, July 22, 2003 | Roger Parloff

[glorgau]

Last month, when Microsoft announced its bellwether decision to award employees restricted stock instead of options, it also made news in a federal courtroom—the kind of news you keep quiet about.

Microsoft suffered utter defeat at a crucial pretrial hearing in what appears to be the highest-stakes patent litigation ever—one in which a tiny company called InterTrust Technologies claims that 85% of Microsoft's entire product line infringes its digital security patents. (See Can This Man Bring Down Microsoft?)

InterTrust's engineers developed and patented what they say are key inventions in two areas: so-called digital-rights management and trusted systems. The technologies are essential to the digital distribution of copyrighted music and movies, and to maintaining the security of e-commerce in general. At its prebubble height, InterTrust (founded in 1990) employed 376 people and marketed its own software and hardware products; today it consists mainly of a patent portfolio, 30 employees, and this lawsuit. An investor group led by Sony Corp. of America and Royal Philips Electronics bought the company in January for $453 million, hoping to convince consumer electronics and tech companies—beginning with Microsoft—of the need to license its patents.

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. 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.

"This is simply another step in a long legal process," says a Microsoft spokesman, putting the best face on it. "Microsoft will continue to defend itself against what we believe are groundless and overbroad claims."

As agreed before the hearing, the parties now enter a round of settlement talks. Though InterTrust declines to place a pricetag on the suit, it's hard to imagine the company settling now for any sum that does not have a "B" in it. InterTrust claims that its inventions cover technologies that Microsoft has been weaving into its Windows XP operating system, Office XP Suite, Windows Media Player, Xbox videogame console, and .NET networked computing platform, to name just a few. If settlement talks fail and InterTrust prevails in court, it would be entitled to a court order halting sales of all those products. InterTrust CEO Talal Shamoon asks rhetorically, "How much would that be worth to Microsoft?"

[Piranha]

Patents only have a 20 year life.

[Nick Danger]

push some kind of secret consipiracy

I'm not claiming any secret conspiracy. I'm claiming that somebody with a big PR department and lots of money is flogging this story. How do I know that? Because I have had big PR departments myself, and I have flogged stories, and I know exactly how this is done.

It accidentally happened one year that the week before COMDEX, ten of the top twelve computer industry rags decided that my product announcement was the biggest news of the week, and deserved to be the headline.

There's no conspiracy required, Eagle. Just money and one of those big PR outfits with 200 flacks in fifty cities. They've been wining and dining those reporters for years... taking them out on sailboats... getting them into a Skybox at the Superbowl. When they call and say 'jump,' the reporters just want to know how high. Don't tell me this doesn't happen... I've had the b*stards out on a sailboat myself.

I believe you have admitted you accept my claim as an industry expert as well.

I can't believe I ever said such a thing. Most of what you say is either contradicted by fact, or is opinion that demonstrates profound ignorance of the subject. And that's when you aren't telling us falsehoods about yourself... like you being in this forum since 1995. When poked on that, you bloviated all the way back to Clinton's first election, until somebody unfortunately pointed out that the Mosaic browser had not been invented then. I was enjoying watching you dance, but that guy went and wrecked it. Phooey.

from everything I'm seeing and hearing on this case, it's all going SCO's way

Well then, let's ask a question. From everything that be read about this InterTrust suit against Microsoft, it would appear that these InterTrust guys are a little farther ahead in pressing their claims than SCO is. In fact I found this:

the so-called Markman hearing was a critical stage, at which definitions of terms and the scope of the patents were decided. Patent attorneys say a decision in favor of a patent holder greatly improves a lawsuit's ultimate chance of success. Armstrong's ruling was issued on July 3.

"A Markman hearing can be one of the most if not the most important rulings by the court in a patent case," said Richard Redano, a patent attorney with Duane Morris. "Once the court rules as matter of law as to how claims are to be interpreted...a case can be ripe for summary judgment."

I know how much you enjoy spreading FUD about the SCO-IBM case, but we seem to have a judicial ruling here, which is something we do not have in the SCO case. It would appear that a rather large number of Microsoft products could be forced off the market, at least according to the lead article of this thread. You have so far demonstrated no concern about this, or about the possibility that Microsoft has stolen this other company's intellectual properties. I for one would enjoy hearing your comments on this subject.

[Golden Eagle]

They agreed to pay that to license the patents for use.

Which is all M$ needs to do, since Sony did that for their customers, right?

[Piranha]

It's the Doctrine of Equivalents, not the Doctrine of Equivalence.

[Golden Eagle]

It accidentally happened one year that the week before COMDEX, ten of the top twelve computer industry rags decided that my product announcement was the biggest news of the week, and deserved to be the headline.

Let me guess. IBM or Novell. Possibly Oracle.

Most of what you say is either contradicted by fact, or is opinion that demonstrates profound ignorance of the subject.

Hardly true, I have posted countless articles from both tech and business trade journals which corroborate my opinion and which you continue to ignore. Questions about my freepership were absurd, I have been posting here for a very long time, likely since Clinton's second election (96 instead of 95, sorry I didn't keep a diary for you).

From everything that be read about this InterTrust suit against Microsoft, it would appear that these InterTrust guys are a little farther ahead in pressing their claims than SCO is.

And what issue do I supposedly even have with this? I already said if M$ is guilty, especially of knowingly infringing, they should pay. You're playing opposite sides of the two different cases. In M$ you want them to pay, in IBM's you do not.

[UnBlinkingEye]

You're right.

I just checked my NOLO Press Patent It Yourself book, a great reference for those interested in obtaining a patent.

[TechJunkYard]

Here's the difference, Eagle.

I already said if M$ is guilty, especially of knowingly infringing, they should pay.

Obviously you're giving MS the benefit of the doubt. Not so with IBM/Linux, which you already have convicted and hanged, with no evidence having been shown in court, on the sole basis of speculation in the press.

That's why no one takes you seriously around here.

[supercat]

Microsoft needs to pay up. The have been aggressively seeking software patents, if InterTrust Technologies beat them to the concept they have no case. BTW if Microsoft knowingly infringed they owe InterTrust Technologies treble damages plus attorneys fees.

Exactly. Laws should be most powerfully enforced against those who push for them in the first place. Unfortunately, what actually happens is usually the reverse.

[Nick Danger]

Let me guess. IBM or Novell. Possibly Oracle.

(d) None of the above. It doesn't matter who it was. The point is, if you have enough money to hire one of the top 2 or 3 high tech PR outfits, you can make the trade rags dance.

In M$ you want them to pay, in IBM's you do not.

Don't go putting words in my mouth. I have said in so many words that if IBM actually did what was alleged, they should pay. I do not believe SCO has much of a case. I say that having read the complaint carefully, and after digging up more facts than most reporters seem to have. I am aware that you can find trade journalists to say otherwise, but the press is full of BS on everything.

Questions about my freepership were absurd, I have been posting here for a very long time, likely since Clinton's second election (96 instead of 95, sorry I didn't keep a diary for you).

That statement is not true. Why are you telling us something about yourself that is not true?

[Cboldt]

I've had a crash course on what I can, should, and shouldn't say in my patent and supporting documentation (like brochures, which I can't even have printed until final approval on my patent comes back . . .

Somebody is giving you bad advice. The "absolute novelty" requirement is satisfied when your patent application is filed.

BTW, it's "doctrine of equivalents," not "doctrine of equivalence."

[Cboldt]

Tough luck if you publish and then see your patent denied.

Usually that means you are even commercial footing with the rest of world. It's not "tough luck," it's "go compete!"

[Golden Eagle]

Have I made one argument that M$ is innocent? I really just don't know as much about this case, for the following reasons:

- it only involves M$, not their customers, any other company besides the litigators, nor any government entity.

- it does not involve damage to the US operating system market or potentially the entire US software industry

- it does not involve any supposed theft of any tangible item, ie. something 'in writing' or 'replayable' which was then duplicated and distributed

- it does not involve the loss of US trade secrets to potential foreign advesaries who are trade restricted, nor the loss of return compensation from those who aren't

I will probably learn more about it, but it is no where as significant international issues, nor for apparently anywhere near the damages that are sought from IBM.

IMO it is probably only a clever ploy by M$ to drag it along and expose the linux crowd as the hypocrites they apparently are when they defend IBM but want to prosecute M$ over a similar case.

[UnBlinkingEye]

You are obviously a lawyer and I know a scam when I see one. Lack of knowledge = you do not understand how I am going to pervert the law to steal this money.

I'm not an attorney, but I've helped contribute to support the lifestyle of several of them.

[Golden Eagle]

It doesn't matter who it was.

It VERY well most certainly does, if you are going to add any credibility to your claims of your supposed past glory years.

I have said in so many words that if IBM actually did what was alleged, they should pay.

I haven't seen that anywhere. All I ever see you say is "those SCO lawyers are shysters" fully indicating your belief that they have a completely groundless case.

I am aware that you can find trade journalists to say otherwise...

But that just doesn't feed into your conspiracy theories you seem intent on delivering along with the little secret agent icon included with many of your posts, does it Danger?

That statement is not true...

Got any proof? Knowing you, zip.

[UnBlinkingEye]

BTW, it's "doctrine of equivalents," not "doctrine of equivalence."

Piranha beat you to it. BTW, Piranha is a great screen name, especially if my guess as to your profession is correct. You guys gobble up the money.

[Nick Danger]

Got any proof?

That you have not been on this forum for as long as you say you have? I will state unequivocally that you have not. You are telling us something about yourself that is not true, and you are insisting that it is true. It's the damnedest thing I've ever seen anyone try to pull here. "Been here since 95." No you haven't. "Maybe it was before that. Possibly as early as Clinton's first election." Nonsense. "Well, 95 or 96, I didn't keep a diary." More nonsense.

If you would BS us about yourself, and then try to BS your way through getting called on it, on what subject would you be credible?

[Golden Eagle]

Was that a yes or a no?

I've been here in one form or another for a long time, which is actually irrelevant. But personal attacks is all I ever get from Danger and his pack of hounds.

[rmlew]

Microsoft can get out of this. All they have to do is admitt that they do not use security algorithms.

[Nick Danger]

I've been here in one form or another for a long time, which is actually irrelevant.

I would agree that whether you have been here for a long time or not is irrelevant. However, the issue of you trying to BS us about simple things concerning even yourself is relevant, because more than a few people have noticed an astonishing propensity on your part to say things that are not so. Many of these are difficult to detect without a fair amount of industry background knowledge, so you are often able to bluster your way past them.

However, this appears to be a very simple, cut-and-dried fact concerning yourself, which is something you presumably have personal knowledge of. You cannot say, "Well, I read that on a web site somewhere." No, this appears to be your BS, about yourself.

You can choose to take this as a personal attack, but I view it as an opportunity to find out whether you are prepared to admit that you tried to BS us about yourself, or whether you will continue to try to BS us.

Your multiple statements concerning how long you have been here are BS. Why should we believe a damned thing you say if you can't even tell the truth about a simple thing that you have personal knowledge of?

[Golden Eagle]

Look Nick, I originally said "I've been here since around 95."

This was in response to the perpetual personal attacks I have received by those illegally trading music or defending Linux from claims it contains stolen property.

I only knew it was a long time ago, and a Clinton election was going on (which I how I got involved in politics and deep online discussion to begin with).

I have since been corrected to the fact that it was probably 96, not 95, which I freely admit I must have been wrong with my original estimate, and it was presented as an estimate.

I am on this forum constantly defending the laws of this country, and more true to my heart are the laws of the Holy Bible.

You can rant and rave than I am a liar, but fact is I probably have close to 500 posts on here in the last month, and this is all you can whine about.

It makes you look extremely petty and jelous. First, because my arguments have destroyed yours. Second, because it bothers you that a long time freeper keeps doing this to you based on principle, and that in itself is begining to reveal how little you actually have.