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Doom for .NET? InterTrust opens up on the MS lawsuit

And says why patents are sometimes good for you...

InterTrust is a tricky one for your average freedom fighter. On the one hand, you'd like to see Microsoft's OS monopoly broken, in which case InterTrust's lawsuit against the company is probably A Good Thing. But on the other, you're against companies who're patented up to the gunwhales using them to bludgeon rivals into submission - so which way do you turn? Last week, InterTrust MetaTrust Utility president Ed Fish talked to The Register, told us why his company was going to win the lawsuit, why sometimes patents might be good for you, and why InterTrust winning might even be good for Open Source.

The last two are related, but not entirely because the destruction of Microsoft's .NET strategy would open up the horizons sufficiently for rivals to prosper. Aside from 'they're breaking into our house and trying to steal our stuff,' InterTrust objects to what Microsoft's doing with .NET because it perceives it as being a proprietary strategy designed to dominate, and to lock out rivals. It's worth noting that InterTrust doesn't actually have to think this in order to establish that Microsoft has been stealing it's stuff, so this could well be idealism rather than beliefs held for purely legal purposes.

"It is a good future goal," says Fish, "to execute a layer so that objects can move around and be interoperable," and that layer should be "open except as required for security... We'd like to see an open, interoperable Internet OS layer that can be available and used by other companies. So a variety of important companies can commit themselves to building off a common platform that is open." Except as required for security, of course.

E-commerce just plain won't work without the establishment and maintenance of secure trust relationships, so the alternatives Fish effectively presents are where that layer is owned by Microsoft and used as a tool for building Microsoft as a services company, or where it is licensed by InterTrust, and outside of it everybody else can do their own thing. Given the respective companies' lines of business it certainly seems more plausible that InterTrust's activities would be confined to the area "except as required for security."

Warming to his theme, Fish waxes lyrical on another hot potato relating to his company, Digital Rights Management. Again, for e-commerce to work, you have to be able to stop people stealing things they haven't paid for, so you really do have to have DRM in some shape or form. If people can just walk into a store and take what they want without paying, then stores will cease to exist, and if the same applies for e-commerce, then e-commerce will not exist.

So long as you accept that, then any objections to DRM you have should be made over the oppressive nature and unfairness of DRM as the record industry and its friends (Microsoft being a prime wannabe here) are currently trying to implement it. Fish simply suggests that the first generation has been a PR disaster in that it is seen as "pitting providers against users," and he's far too tactful to point that the providers have been the ones doing the pitting, by aiming to vastly increase their revenues without accepting the need for radical changes in their business models, and by pouring money into building better padlocks.

If users perceive something as having a value, and the price and the terms are fair, then they will probably pay for it. They need simple, secure and non-oppressive ways to prove if they've paid for something already, and no doubt in some parallel universe DRM is a neutral system that establishes and protects their rights, and is not part of a battery of weaponry being used to take them away. That's what it already says on the label back on Planet Earth, and it might even become true here if consumer resistance triumphs over the providers in the end.

The case itself

Lawsuits against Microsoft, The Register sourly pointed out to Fish, have an unsatisfactory history. Generally Microsoft incorporates something more into the OS (compression, a GUI, say), the victim sues over a period of some years, there's then an out of court settlement, at which point the victim stops howling and Microsoft carries on happily. So maybe Microsoft has been stealing your stuff, but why the hell should we care if the net effect is simply going to be InterTrust collecting an unspecified bundle a couple of years down the line, and Microsoft carrying on happily? And if Microsoft is doing so much infringing in Windows XP and .NET, why don't you show us your preliminary injunction?

The answer is multi-headed, and takes us through a fair slab of the interview. Last week InterTrust added three more patents to its suit against Microsoft, bringing the total so far to seven patents claimed to be infringed, involving a total of over 50 patent claims. Two of the new ones cover .NET, while the third concerns XP's product activation features. InterTrust's current 22 US patents represent, says Fish, "about ten per cent of what we have based on the specification filed in 1995."

This portfolio is in the company's view absolutely key to Digital Rights Management and Trust relationships, and (again in the company's view) Microsoft should have licensed the technology from InterTrust, because it is practically inconceivable that a non-infringing alternative implementation of .NET could be invented. This is, says Fish, one of the larger patent cases in US history, and is second only to the DoJ's action in terms of importance for Microsoft's future. "We invented the core technology for digital trust management and we're prepared to go all the way to resolution."

So no accepting sacks of gold in exchange for silence then? What about that preliminary injunction?

"We did not yet ask for a preliminary injunction," he responds, first because the courts tend not to be inclined to grant them under such conditions, and second because the real impact won't occur for at least another 18 months. InterTrust could ask for a preliminary injunction to block XP now, but the court would certainly consider the impact on Microsoft, the PC business and the economy in general when considering the likelihood of success of the main action. It'd clearly have to be pretty damn sure.

Preliminary injunctions are most likely to be asked for and granted when a company's core business is in clear and present danger, and InterTrust clearly does not think this is the case. Microsoft's rights management efforts are currently a moving target, with Fish observing that Media Player and e-book technologies are incompatible with one another, and the Common Language Runtime is different again. Under these cicumstances the big pay-off in the rights management arena is still some distance away: "the hockey stick is 24-36 months in the future."

So actually, it's not just the rollout of Windows XP that InterTrust's legal activities will fail to impact on, it's anything up to the next three revs of the OS. After which?

It's the big ones Fish is interested in, Polaroid versus Kodak, Bell versus Western Union. Polaroid's action against Kodak ground on for years, then one day Polaroid won and Kodak's instant photo business was shut down, instantly. "If a product infringes it's a matter of law that you're entitled to an injunction." The Bell-Western Union comparison is perhaps a less happy one, given that Western Union hired Edison, who "made a better phone," and still lost because Bell had the patents.

But it illustrates the point. If InterTrust does own the fundamentals of digital rights management technology, and hence the fundamentals of .NET, then when it proves it in court the lights will go off very suddenly, and Microsoft's .NET strategy will be toast. Particularly so if Fish is right about the difficulties involved in inventing alternatives. InterTrust will still own the technology, the partners who've worked with it in the meantime will have their foresight rewarded, and Microsoft will have to license and fall into line.

So how did you get to be so smart?
The trick was prescience above and beyond the call, combined with a clear understanding of what they had. Around 91-92, InterTrust saw "the world as it has emerged," and started building for it. "It provides great leverage." As far as the Internet is concerned the obvious comparison is Netscape but, "think where Netscape would be if Netscape had patents." There is indeed a moral there. Which takes us to the other component of the success formula. "People ask us, how did you assemble such a legal team in such a little company?"

Figuring out the importance of hanging on to the technology was probably more prescient than figuring out the technology itself, and InterTrust's assiduous filings could well result in the little guy winning this time. But a little guy winning via patents and shedloads of lawyers? It's a complex world we live in... ®

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