Patent Lawsuits Crowd Microsoft’s Horizon

While Microsoft Corp. has reached a $440 million settlement with InterTrust Technologies Corp. around digital rights management patents, it is far from clearing the slate of patent-infringement claims against it.

Microsoft, the world’s largest software maker, remains a major patent target. It is battling between 30 and 35 ongoing patent cases that cover everything from the automatic starting of an application in Windows to the sending of Web alerts. And it is facing more patent claims against it than in the past. Just 18 months ago, it had 20-some patent cases against it, company spokesman Jim Desler said.

“There’s been an increase for Microsoft but also an industrywide increase,” Desler said. “We think part of that is the phenomenon that many companies that did not survive the burst of the dot-com bubble were left with nothing but a portfolio of patents” from which to make money.

While fighting claims that it views as frivolous or invalid, Microsoft also has followed a strategy of settling claims when it believes the patent is valid or that the litigation is hurting its moves into a new market, said Matt Rosoff, an analyst at Directions on Microsoft in Kirkland, Wash.

InterTrust is the most recent example: The settlement made sense for Microsoft because the company wants to aggressively expand its DRM offerings and DRM features in Windows, Rosoff said.

“InterTrust was the biggest one,” he said of the patent-infringement cases. “It’s in a very important area and an increasingly important one to Microsoft. … When Microsoft announces a new digital rights management initiative, it wants to make sure that all the uncertainty is taken away.”

Microsoft’s willingness to settle also points to its increasing focus on turning once-bitter rivals into partners, Rosoff said.

Click here for the full story.