bluecell
08-04-2003, 10:26 AM
A friends sent me this Fortune article (http://www.fortune.com/fortune/technology/articles/0,15114,466180,00.htm). It looks like this will hurt quite a bit.Microsoft's Patent Problem
In the biggest patent case ever, the tech giant is getting trounced.
FORTUNE
Tuesday, July 22, 2003
By Roger Parloff
Last month, when Microsoft announced its bellwether decision to award employees restricted stock instead of options, it also made news in a federal courtroom—the kind of news you keep quiet about.
Microsoft suffered utter defeat at a crucial pretrial hearing in what appears to be the highest-stakes patent litigation ever—one in which a tiny company called InterTrust Technologies claims that 85% of Microsoft's entire product line infringes its digital security patents. (See Can This Man Bring Down Microsoft? (http://www.fortune.com/fortune/technology/articles/0,15114,400412,00.html))
InterTrust's engineers developed and patented what they say are key inventions in two areas: so-called digital-rights management and trusted systems. The technologies are essential to the digital distribution of copyrighted music and movies, and to maintaining the security of e-commerce in general. At its prebubble height, InterTrust (founded in 1990) employed 376 people and marketed its own software and hardware products; today it consists mainly of a patent portfolio, 30 employees, and this lawsuit. An investor group led by Sony Corp. of America and Royal Philips Electronics bought the company in January for $453 million, hoping to convince consumer electronics and tech companies—beginning with Microsoft—of the need to license its patents.
Microsoft argued in court that crucial phrases in InterTrust's patents were too vague to be enforceable, and that others required such narrow interpretation that they would have been hard for Microsoft to infringe. But in her July 3 ruling, an Oakland judge resolved 33 of 33 disputed issues against Microsoft and rebuked the company's lawyers for wasting her time by promising proof that never materialized—legal vaporware, in essence.
"This is simply another step in a long legal process," says a Microsoft spokesman, putting the best face on it. "Microsoft will continue to defend itself against what we believe are groundless and overbroad claims."
As agreed before the hearing, the parties now enter a round of settlement talks. Though InterTrust declines to place a pricetag on the suit, it's hard to imagine the company settling now for any sum that does not have a "B" in it. InterTrust claims that its inventions cover technologies that Microsoft has been weaving into its Windows XP operating system, Office XP Suite, Windows Media Player, Xbox videogame console, and .NET networked computing platform, to name just a few. If settlement talks fail and InterTrust prevails in court, it would be entitled to a court order halting sales of all those products. InterTrust CEO Talal Shamoon asks rhetorically, "How much would that be worth to Microsoft?"In other news, hackers have Microsoft squirming --- AGAIN! If you haven't already heard about the latest Windows security threat, check out this ZDNet article (http://zdnet.com.com/2100-1105_2-5059198.html).Waiting for the worm to turn up
By Robert Lemos
CNET News.com
August 1, 2003, 4:21 PM PT
LAS VEGAS--With all the black clothes and fatalism, security researchers here might as well be attending a conference on late Russian authors.
The black clothes go with the security territory at the Black Hat Security Briefings; the fatalism comes from waiting for a worm writer to take advantage of a widespread Windows vulnerability.
The vulnerability, in a component of Microsoft's operating system that allows people to remotely access certain functions on a computer--such as printing and file sharing--was made public by the software giant on July 16. Nine days later, a hacking group in China and an American security researcher released code that exploits the flaw.
Security experts are now just waiting for the other shoe to fall. The fear: The DefCon hacker convention being held this weekend will be the trigger for some online vandal to write a worm.
"Oh yeah, there is a lot of awareness right now," said Marcus Sachs, cybersecurity program director for the U.S. Department of Homeland Security. "We definitely have the three watches paying attention."
The three watches are the Federal Computer Incident Response Center (FedCIRC), the National Communications System (NCS) and the National Infrastructure Protection Center (NIPC).
The Department of Homeland Security issued an alert earlier this week warning companies and government agencies to lock down their systems.
"Because of the significant percentage of Internet-connected computers running Windows operating systems and using high-speed connections (DSL or cable, for example), the potential exists for a worm or virus to propagate rapidly across the Internet carrying payloads that might exploit other known vulnerabilities in switching devices, routers or servers," the agency warned.
Microsoft personnel at the conference also carried an air of fatalism about the worm. Members of the Secure Windows Initiative said that the company was on watch. Other sources indicated that the company was taking extraordinary steps, such as requiring employees to patch their machines quickly or risk being disconnected from the corporate network.
The software giant had been hit hard by the SQL Slammer worm, a self-spreading program that took advantage of a six-month-old flaw that even Microsoft hadn't completely excised from its systems.
A security manager from a large financial firm said that the patching process was being slowed by the large number of computers that had to be fixed.
"We are making progress," he said. "But we still only have half our systems patched."
The gloomy outlook is not universal. A systems administrator for a university research institute said that his group had machines patched and had added firewall rules to limit the potential of being hit.
"If we aren't ready now, we never will be," he said.
In the biggest patent case ever, the tech giant is getting trounced.
FORTUNE
Tuesday, July 22, 2003
By Roger Parloff
Last month, when Microsoft announced its bellwether decision to award employees restricted stock instead of options, it also made news in a federal courtroom—the kind of news you keep quiet about.
Microsoft suffered utter defeat at a crucial pretrial hearing in what appears to be the highest-stakes patent litigation ever—one in which a tiny company called InterTrust Technologies claims that 85% of Microsoft's entire product line infringes its digital security patents. (See Can This Man Bring Down Microsoft? (http://www.fortune.com/fortune/technology/articles/0,15114,400412,00.html))
InterTrust's engineers developed and patented what they say are key inventions in two areas: so-called digital-rights management and trusted systems. The technologies are essential to the digital distribution of copyrighted music and movies, and to maintaining the security of e-commerce in general. At its prebubble height, InterTrust (founded in 1990) employed 376 people and marketed its own software and hardware products; today it consists mainly of a patent portfolio, 30 employees, and this lawsuit. An investor group led by Sony Corp. of America and Royal Philips Electronics bought the company in January for $453 million, hoping to convince consumer electronics and tech companies—beginning with Microsoft—of the need to license its patents.
Microsoft argued in court that crucial phrases in InterTrust's patents were too vague to be enforceable, and that others required such narrow interpretation that they would have been hard for Microsoft to infringe. But in her July 3 ruling, an Oakland judge resolved 33 of 33 disputed issues against Microsoft and rebuked the company's lawyers for wasting her time by promising proof that never materialized—legal vaporware, in essence.
"This is simply another step in a long legal process," says a Microsoft spokesman, putting the best face on it. "Microsoft will continue to defend itself against what we believe are groundless and overbroad claims."
As agreed before the hearing, the parties now enter a round of settlement talks. Though InterTrust declines to place a pricetag on the suit, it's hard to imagine the company settling now for any sum that does not have a "B" in it. InterTrust claims that its inventions cover technologies that Microsoft has been weaving into its Windows XP operating system, Office XP Suite, Windows Media Player, Xbox videogame console, and .NET networked computing platform, to name just a few. If settlement talks fail and InterTrust prevails in court, it would be entitled to a court order halting sales of all those products. InterTrust CEO Talal Shamoon asks rhetorically, "How much would that be worth to Microsoft?"In other news, hackers have Microsoft squirming --- AGAIN! If you haven't already heard about the latest Windows security threat, check out this ZDNet article (http://zdnet.com.com/2100-1105_2-5059198.html).Waiting for the worm to turn up
By Robert Lemos
CNET News.com
August 1, 2003, 4:21 PM PT
LAS VEGAS--With all the black clothes and fatalism, security researchers here might as well be attending a conference on late Russian authors.
The black clothes go with the security territory at the Black Hat Security Briefings; the fatalism comes from waiting for a worm writer to take advantage of a widespread Windows vulnerability.
The vulnerability, in a component of Microsoft's operating system that allows people to remotely access certain functions on a computer--such as printing and file sharing--was made public by the software giant on July 16. Nine days later, a hacking group in China and an American security researcher released code that exploits the flaw.
Security experts are now just waiting for the other shoe to fall. The fear: The DefCon hacker convention being held this weekend will be the trigger for some online vandal to write a worm.
"Oh yeah, there is a lot of awareness right now," said Marcus Sachs, cybersecurity program director for the U.S. Department of Homeland Security. "We definitely have the three watches paying attention."
The three watches are the Federal Computer Incident Response Center (FedCIRC), the National Communications System (NCS) and the National Infrastructure Protection Center (NIPC).
The Department of Homeland Security issued an alert earlier this week warning companies and government agencies to lock down their systems.
"Because of the significant percentage of Internet-connected computers running Windows operating systems and using high-speed connections (DSL or cable, for example), the potential exists for a worm or virus to propagate rapidly across the Internet carrying payloads that might exploit other known vulnerabilities in switching devices, routers or servers," the agency warned.
Microsoft personnel at the conference also carried an air of fatalism about the worm. Members of the Secure Windows Initiative said that the company was on watch. Other sources indicated that the company was taking extraordinary steps, such as requiring employees to patch their machines quickly or risk being disconnected from the corporate network.
The software giant had been hit hard by the SQL Slammer worm, a self-spreading program that took advantage of a six-month-old flaw that even Microsoft hadn't completely excised from its systems.
A security manager from a large financial firm said that the patching process was being slowed by the large number of computers that had to be fixed.
"We are making progress," he said. "But we still only have half our systems patched."
The gloomy outlook is not universal. A systems administrator for a university research institute said that his group had machines patched and had added firewall rules to limit the potential of being hit.
"If we aren't ready now, we never will be," he said.