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Microsoft Expected to Settle With Burst

The software giant denies wrongdoing, but experts note that it's been eager to make out-of-court deals lately.

September 29, 2003|From Associated Press

For months, executives at Microsoft Corp. and Burst.com Inc. discussed Burst's technology for speeding the transmission of movies and sound over the Internet.

The talks went nowhere, but Microsoft ultimately developed multimedia technology of its own, code-named Corona, prompting Santa Rosa, Calif.-based Burst to sue Microsoft on charges of theft and anti-competitive behavior.

Though Microsoft denies wrongdoing, legal and industry experts believe it's a matter of time before Microsoft seeks a settlement after a legal setback by a federal judge who has appeared skeptical of the company's claims.

Early this month, U.S. District Judge Frederick Motz in Baltimore ordered that the world's largest software company search for any deleted e-mails relating to those discussions with Burst.

"Microsoft has been lately on a sort of settling spree, and I think they might take a serious look at settling this case with Burst," said Matt Rosoff, an analyst with Directions on Microsoft, an independent research firm in Kirkland, Wash., near Microsoft's Redmond headquarters.

The case, moved from San Francisco to Baltimore for pretrial matters as part of a consolidation of similar lawsuits against Microsoft, is not expected to go to trial for a year, barring a settlement.

Microsoft spokesman Jim Desler wouldn't comment on the likelihood of a settlement with Burst but said, "We're always open to looking at reasonable ways to settle ongoing litigation."

Microsoft already has settled an antitrust lawsuit with the federal government and all but one state that had sued over its use of the Windows operating system to muscle out rivals, including competitors to its Web browser. The settlement gives rivals more flexibility to offer competing software on Windows computers.

Motz is not new to Microsoft lawsuits. In December, he ordered Microsoft to ship Windows with the latest version of Sun Microsystems Inc.'s Java programming language. The preliminary injunction was later overturned on appeal, though the case itself is pending.

Bob Lande, director of the American Antitrust Institute in Washington, said Motz's past actions indicate that the judge is leery of Microsoft's arguments.

"This judge hasn't believed them in the past, so he's going to approach their arguments with a bit of skepticism," Lande said.

The Burst dispute is over technology it believes potentially could power next-generation video-on-demand services.

Burst's streaming technology pushes data, through compression and other means, faster than what consumers are able to see or hear. The extra information is stored on the user's computer and is called upon to smooth out disruptions resulting from network congestion.

Corona, announced in late 2001 and now known as Windows Media 9, does the same thing and uses ideas Burst shared with Microsoft during the discussions, Burst said in its lawsuit.

The lawsuit, filed in June 2002, also accuses Microsoft of shutting out potential competitors such as Burst through exclusive deals and other practices that build on Microsoft's dominance with Windows. Burst seeks unspecified damages and an end to Microsoft's use of the technology.

Microsoft says it did nothing wrong.

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