Patent fight shadows Microsoft lawsuit

Macrovision is sparring with rival InterTrust Technologies over patents each holds on similar digital rights management technologies--similar enough that the United States Patent and Trademark Office agreed several weeks ago to decide whether the two companies' patents actually refer to the same thing, and whether just one company should hold the rights.

The Patent Office scrutiny, called an "interference proceeding," was requested years ago by InterTrust, which is also suing Microsoft for patent infringement. InterTrust contends that virtually all of Microsoft's key software, ranging from the Windows operating system to its Media Player, trespasses on its content protection patents.

But now Macrovision claims it could inherit a large portion of InterTrust's intellectual property if it wins rights to the single contested patent. And if that happens, it isn't nearly as interested in pursuing lawsuits against Microsoft, said Brian Dunn, executive vice president at Macrovision.

"We have a friendly relationship with Microsoft," Dunn said. "Our goal is to get everyone to come to an agreement on patent licensing, in order to move the market forwards."

The claims and counterclaims flying between the two digital rights companies are extreme even by the normally contentious nature of the digital rights management business. And their descriptions of the possible outcomes of the proceeding are so varied that they seem to be talking about different issues.

InterTrust says Macrovision's claims are absurd. The Macrovision patent was purchased from a now-defunct company called MediaDNA, which shopped the technology to many different groups--including InterTrust--several years ago. At the time, InterTrust looked at the patents and declined the offer, said CEO Talal Shamoon.

InterTrust later asked federal regulators to examine the patents in the interference proceeding because the company believed the MediaDNA patent conflicted with pieces of its own, and the two patents were filed within weeks of each other. The interference proceeding would be similar to a court trial, examining each company's records to figure out which company actually invented the process first.

But the proceeding is focused on the former MediaDNA property now owned by Macrovision, not InterTrust's patents. And the patent in question covers only a tiny fraction of InterTrust's core intellectual property, InterTrust said. Even if it loses, InterTrust's primary patent rights will be unaffected, the company said.

"The idea that somehow this will be a vacuum cleaner that sucks all our patent claims out is totally specious," said Doug Derwin, InterTrust's senior vice president of digital intellectual property strategy. "Why would we have started a process that could result in us losing our critical assets?"

Macrovision's Dunn responded that InterTrust is underestimating the importance of the MediaDNA patents, which cover techniques for preparing a file to be digitally protected. Macrovision has also asked the Patent and Trademark Office to expand the scope of the original InterTrust-sparked proceeding somewhat, he added.

"We believe that our patents are at the very core of digital rights management," Dunn said. "We believe that you can't practice a significant percentage of InterTrust's (techniques) without infringing on us."

Microsoft declined to comment on the issue. Independent intellectual-property rights attorneys say the outcome is dependent on federal officials, who set the scope of the hearing but can modify it over time.

Don't expect an easy answer to the puzzle anytime soon. The interference proceeding could take years to be decided by the Patent Office, attorneys say.