Microsoft resolved another of its long-running legal disputes yesterday by paying $440m (£240m) to InterTrust Technologies and agreeing to license software from its Californian rival.
InterTrust has an extensive library of patents relating to digital rights management (DRM) technology, which is used to protect the distribution of music, films and other content on the internet. The company, part-owned by Sony, sued Microsoft for patent infringement in April 2001.
Microsoft hopes the deal reached over the weekend will pave the way for faster adoption of DRM technology, which plays a critical role in persuading content owners such as big movie studios to put their wares on the web.
The InterTrust suit raised the prospect that media companies using Microsoft's technology to make content available over the internet would also have to pay a licence fee to the Californian company.
But the settlement means customers can use Microsoft products and services without a licence from InterTrust. Software developers which use the Microsoft platform will also not need a separate licence.
"DRM solutions are essential to secure valuable personal, business and commercial content in a massively connected world," said Will Poole, senior vice-president of the Windows client business at Microsoft. "Microsoft is committed to working with the broader industry to accelerate the promotion of DRM standards and solutions."
Four years ago, Microsoft linked up with Xerox to create ContentGuard, a new internet company designed to deliver DRM software to protect books, documents, music and other valuable content distributed over the web. Mr Poole said that, while ContentGuard owns critical intellectual property related to DRM, "other parties hold relevant intellectual property as well".
Talal Shamoon, chief executive of InterTrust, said the deal validated the company's software. "InterTrust will continue to help drive the adoption of these important technologies through our inventions, licensing programmes and reference technologies."
InterTrust was bought two years ago for more than $450m by a consortium including Sony, Philips and investment bank Stephens.
The success of illegal file-swapping sites in the wake of Napster has created suspicion of the internet among content owners. DRM technology is intended to ensure that digital content cannot be copied or distributed without the owner's permission.
In the UK last week, BT announced a new suite of products under the BT Rich Media banner, aimed at content owners ranging from film studios to local football clubs.
Microsoft's deal with InterTrust comes two weeks after it reached a near $2bn settlement with Sun Microsystems.
But Microsoft is still battling with the European Union, which last month levied a record fine of nearly €500m (£333m) for abusing its market dominance. Microsoft is appealing against the decision.
Daum Communications, owner of South Korea's leading internet portal, said over the weekend it is suing Microsoft over its bundling of instant messaging software with the Windows operating system.
