[Beware: cross-posted]
The DRM players are battling it out, and MS seems to be in a vulnerable position:
http://www.fortune.com/fortune/print/0%2c15935%2c400412%2c00.html
INTERTRUST Can Victor Shear Bring Down Microsoft?
Maybe not. But his company's patent suit is the biggest legal threat to Microsoft since the antitrust case.
FORTUNE Tuesday, December 17, 2002 By Roger Parloff
A small Santa Clara, Calif., company called InterTrust Technologies maintains that it is, in fact, that company. Though there are those who dispute this claim, InterTrust has some awfully big players convinced, including consumer electronics giants Sony and Philips. Indeed, in November, the two companies offered to buy InterTrust for $453 million in cash; as FORTUNE goes to press, they are in the process of trying to close the acquisition.
In its current incarnation, InterTrust consists of 39 employees and a patent portfolio: 26 issued patents and about 85 more pending, all in the fields of DRM and trusted systems. InterTrust also has one other asset of note: a suit against Microsoft that appears to be the highest-stakes patent litigation in history. The suit's charges give a good feel for the scope and breadth of InterTrust's patents, at least as InterTrust sees it. The company says its patents are being infringed every time Microsoft ships its Windows XP operating system; Office XP suite; Word 2002 word processor; Excel 2002 spreadsheet; Outlook 2002 e-mail client; PowerPoint 2002 slide presentation software; Windows Media Player; Xbox videogame console; Microsoft software for servers, mobile phones, pocket computers, and consumer electronics devices; and many of the components and tool kits that Microsoft now markets in connection with its most cutting-edge "bet the company" initiative: the networked computing and web-services platform known as .NET. Understand what that means: InterTrust is seeking an injunction barring distribution of about 85% of Microsoft's product line. (Though the DRM and trusted systems technologies form only a piece of each product, they have been, in Microsoft's trademark fashion, tightly integrated into these larger programs.) InterTrust seeks damages too--which could be trebled if Microsoft were shown to have acted willfully. Polaroid's spectacular 1976 patent suit against Kodak--which eventually forced Kodak to scrap its $2 billion foray into instant photography and pay $900 million in damages--is dwarfed by the scope of the InterTrust-Microsoft litigation.
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