Microsoft Lawyers Keeping Busy

Microsoft Logo with a gavel and blind justice
AP / CBS
Microsoft Corp. is paying $440 million to InterTrust Technologies Corp. to settle a 3-year-old patent infringement lawsuit over technology for protecting music, movies and other digital content against piracy.

Monday's announcement marked the second settlement this month by the world's No. 1 software company. Microsoft agreed about two weeks ago to pay Sun Microsystems $1.6 billion to settle a private antitrust suit and resolve patent claims.

Meanwhile, a South Korean Internet portal filed an antitrust lawsuit Monday against Microsoft, alleging the U.S. computer software giant violated trade regulations by tying instant messenger software to its Windows operating system.

Daum Communications Corp. said it was seeking 10 billion won ($8.7 million) in damages it claimed resulted from Microsoft's Windows XP, which includes the instant messaging system MSN Messenger.

Daum, which controls about 10 percent of Korea's instant messaging market, filed the lawsuit in a Seoul district court.

"Such anticompetitive behavior has resulted in massive financial losses to Daum," the company said.

Microsoft, based in Redmond, Wash., denied the accusation Monday.

"Microsoft has competed fairly, consistent with Korean competition law," spokesman Min Seog-seo said. "There is robust competition in the Korean instant messenger market, and that competition continues to be a good thing for Korean consumers."

The settlement with InterTrust, of Santa Clara, Calif., resolves all legal issues between the two companies and grants Microsoft a license to InterTrust's patents on digital rights management, code designed to prevent the unauthorized copying of files, the companies said.

A key function of DRM is to limit the number of copies that can be made from a song or movie that is downloaded over the Internet — a growing business as the distribution of entertainment goes increasingly digital.

The settlement is part of an effort "to provide peace of mind for our customers and partners by letting them know that patent licensing is our responsibility," said Marshall Phelps, Microsoft deputy general counsel and corporate vice president of intellectual property, or IP.

With the agreement, customers can use Microsoft products and services without a license from InterTrust. Developers, however, may need a license from InterTrust for other uses, including the combination of Microsoft technology with third-party technology, according to the joint statement.

InterTrust, owned by a joint venture of Sony Corp., Philips Electronics NV and the investment banking company Stephens Inc., sued Microsoft in April 2001.

At the time, InterTrust officials talked of trying to halt sales of the then-new Windows XP operating system and said damages could amount to billions of dollars.

The lawsuit followed a breakdown in licensing talks in 1998-2000, when Microsoft was considering an investment of more than $100 million in InterTrust. Settlement talks began at the urging of a judge last summer.

Last month Microsoft agreed to settle a patent lawsuit filed by AT&T Corp. over voice-recognition technology for terms that were not disclosed.

Last year Microsoft settled claims by Time Warner Inc. involving Netscape Communications, now owned by Time Warner's America Online unit, and paid $35 million to settle a case brought by Immersion Corp. over joystick technology.