Sony licenses InterTrust's digital rights technology

Consumer electronics giant Sony has agreed to license patents from beleaguered InterTrust Technologies Corp. to create digital rights management (DRM) technology, a deal valued at over US$28.5 million.

InterTrust will receive this one-time fee plus future royalties from Sony, which plans to use InterTrust's patents as a basis for DRM features that will be integrated into its digital media products and services, InterTrust officials said on Thursday. The deal gives Sony rights to InterTrust's 24 existing U.S. patents, plus future rights to the 90 patents that are pending.

Twelve-year-old InterTrust, which earlier this month announced plans to forgo product manufacturing and focus on licensing its intellectual property instead, is currently embroiled in a legal spat with Microsoft Corp. In April of 2001 InterTrust filed a suit with the U.S. District Court for the Northern District of California claiming Microsoft's Windows Media Player and other products infringed upon its DRM patents.

Since then, InterTrust has amended that filing to include additional patents and other Microsoft products, such as Windows XP, Office XP, and its .Net platform for Web services.

The company is seeking monetary damages and injunctions against Microsoft to prevent it from selling products that allegedly infringe on its patents. Microsoft has denied wrongdoing and filed a counter patent-infringement suit against InterTrust.. The law suits are still pending.

Publically held InterTrust earlier this year pared down its workforce to 35 employees from 115, officials said. For its first quarter ending March 31, the company reported a net loss of $12.4 million.

DRM technology is implemented in software and most often used to protect digital content, such as music and video clips, from unauthorized copying. But InterTrust's technology is also used by corporations for digital policy management, a company official said. For example, a company might use DRM technology to manage the distribution, access, and modification of its compliance policies with federal regulations, she said.

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