Microsoft loses key patent ruling

With little fanfare, a federal judge has issued a critical ruling supporting a patent lawsuit against Microsoft brought by InterTrust, a digital rights management company.

In a crucial preliminary hearing aimed essentially at setting the ground rules for the trial itself, Judge Saundra Brown Armstrong ruled strongly in favor of InterTrust Technologies. The company is suing Microsoft on 144 counts of patent infringement, contending that Microsoft products ranging from the Windows operating system to the Xbox game system violate its digital rights management patents.

No decision has been made on whether Microsoft actually has infringed on InterTrust's patents. But the so-called Markman hearing was a critical stage, at which definitions of terms and the scope of the patents were decided. Patent attorneys say a decision in favor of a patent holder greatly improves a lawsuit's ultimate chance of success. Armstrong's ruling was issued on July 3.

"A Markman hearing can be one of the most if not the most important rulings by the court in a patent case," said Richard Redano, a patent attorney with Duane Morris. "Once the court rules as matter of law as to how claims are to be interpreted...a case can be ripe for summary judgment."

In InterTrust's case, the ruling may serve to put stones in a slingshot aimed at Microsoft. The small digital rights management company has been steadily adding claims to a lawsuit originally filed more than two years ago, with little previous sign of progress.

Digital rights management technology, more commonly known as "anti-piracy technology," is meant to protect content such as songs and videos from being illegally copied. Microsoft has moved aggressively to dominate the emerging field. InterTrust contends that in doing so, Microsoft infringed on its patents.

In the interim, a joint venture owned by Sony and Philips Electronics bought the struggling InterTrust, which is now focused on licensing its intellectual property.

InterTrust CEO Talal Shamoon said his company had welcomed the ruling, but that it was also looking forward to the possibility of court-sponsored negotiations between the parties.

"They have a difficult defense to mount," he said. "We're looking forward to a constructive settlement conference."

A Microsoft spokesman said that the company would "continue to defend itself against what we believe are groundless and overly broad claims."

While the hearing does interpret critical definitions in InterTrust's favor, it by no means marks the end of the trial. Attorneys note that the interpretations made in Markman hearings are often the grounds for appeal, and are often overturned during those appeals.

"It's a very important victory for the patent holder, but they're a long way off from winning the ball game," patent attorney Bruce Sunstein said.