Update: Microsoft, InterTrust settle patent case for $440M

IDG News Service - Less than two weeks after settling its legal disputes with Sun Microsystems Inc. (see story), Microsoft Corp. said today that it reached an agreement with InterTrust Technologies Corp. to settle a long-running case over InterTrust's digital rights management software.
As part of the deal, Microsoft will make a one-time, $440 million payment to InterTrust to license that company's patent portfolio. Santa Clara, Calif.-based InterTrust will be given the right, under Microsoft-owned patents, to design and publish digital rights management (DRM) and security technical specifications, Microsoft said in a statement.
Microsoft received rights to use InterTrust's technology for the life of its patents, around 20 years, said David Kaefer, director, business development, intellectual property and licensing at Microsoft.
Customers are covered, as are content providers using Microsoft technology to protect content, he said.
Software developers using Microsoft development tools to create new software applications with DRM that are provided by Microsoft are also covered. However, companies or individuals that want to create new DRM technology or features "over and above" what is in Microsoft's products and tools need a separate InterTrust license, he said.
The settlement resolves a 3-year-old legal dispute in which InterTrust claimed that features in Microsoft's products infringed on its DRM patents. Initially focused on the Windows Media Player and electronic-book reader programs, the suit was expanded to cover components of the Windows XP operating system, Office XP suite of applications, .Net technology and Windows File Protection technology.
In a statement attributed to InterTrust CEO Talal Shamoon, the company said that its settlement with Microsoft "validates InterTrust's intellectual property portfolio as seminal to advancing DRM and trusted computing in the marketplace."
"We're extremely happy that the largest player in the IT space has taken a license for our portfolio. It's a statement to the market of the importance of our inventions to the next generation of computing," Shamoon said.
Kaefer said he hopes the deal will clear up "uncertainty in the DRM space."
"We spent a lot of months hammering out provisions that will give our customers 100 percent protection. This agreement lets customers know they have the right to build on our DRM technologies," he said.
InterTrust will keep working to develop DRM technology and expects to benefit from a "thriving licensing business going forward," Shamoon said in the statement.
With concern mounting over piracy of music and, increasingly, video on the Internet, Microsoft and other major technology vendors, such as Intel Corp., have been looking to build so-called trusted platforms that integrate DRM technology with a