A federal judge has given a significant boost to InterTrust Technology Corp.'s patent infringement claims against Microsoft Corp., accepting InterTrust's definitions of critical terminology and chastising Microsoft for failing to substantiate many of its arguments.
The two companies compete in the market for anti-piracy technology -- in particular, software to protect digital music, movies and other goods delivered electronically. But with Microsoft winning far more customers for its digital-rights management tools, Santa Clara, Calif.-based InterTrust has shifted its focus to licensing and enforcing its patents.
U.S. District Judge Saundra Brown Armstrong issued a preliminary ruling July 3, interpreting 31 terms and phrases from 12 representative claims within the InterTrust patents. She defined each term as InterTrust had proposed with little or no alteration, effectively giving those claims the broad reach sought by InterTrust.
The judge has yet to decide whether InterTrust's 11 patents were violated by Microsoft's products, including its recent operating systems, productivity programs, digital media player and Xbox game console. But two independent patent attorneys said her ruling could make it easier for InterTrust to prove its case.
"This was pretty much a clean sweep for InterTrust," lawyer David Hayes said. "I think that's going to put quite a bit of pressure on Microsoft to do one of two things: either appeal or go into serious compromise negotiations."
Added lawyer Bruce Sunstein, "There's still a long ways to go, but this puts the wind behind InterTrust for sure. There's no doubt about that. It makes it possible for InterTrust to go forward with much more confidence."
Microsoft spokesman Jim Desler responded, "We continue to believe that InterTrust's claims are very broad, and their pursuit of these claims is more a result of unsuccessful product development and business plan than based on the merits."
Armstrong cited Microsoft's attorneys' "persistent failure" to support their arguments with evidence and legal precedents and threatened them with sanctions.
"The court will not tolerate a party's creating a dispute by taking a position on a material issue where that party does not have a good-faith basis for that position that is well-supported by fact and by law," she wrote.
InterTrust was bought for $453 million in November by Fidelio Acquisition Co., a venture launched by Sony Corp., Royal Philips Electronics and Stephens Acquisition.