Microsoft, InterTrust Settle Patent Suit

Microsoft and InterTrust said Monday they have settled all outstanding patent litigation between the two companies. Microsoft will pay InterTrust a one-time payment of $440 million, Microsoft said early Monday.

At issue in the three-year-old suit was how software manages the use and security of digital music and video.

The original complaint, filed in April 2001 in the U.S. District Court for the Northern District of California, alleged Microsoft products, including Windows and the Windows Media Player, violated InterTrust patents. That suit was expanded in June of that year when InterTrust was awarded a new patent.

InterTrust, Santa Clara, Calif., is a pioneer in the now-booming field of digital rights management (DRM.) Microsoft has been pushing its own DRM agenda for multimedia and "information worker" information.

The latest legal news comes just a week after Microsoft agreed to settle intellectual property issues, including patent disputes, with Sun Microsystems. In that case, Microsoft agreed to pay Sun $1.6 billion. Microsoft in the past has paid its way out of legal jams. It anted up $150 million to Apple Computer years ago to resolve licensing issues, but it appears that there is some urgency now to clear the decks of remaining litigation.

Observers say Microsoft has been under pressure from Wall Street and others to clear up potentially expensive legal judgments. It still faces a potentially major judgment in the European Union's long-running antitrust investigation and a civil antitrust suit lodged by RealNetworks.