April 11, 2005 5:30 AM PDT

Microsoft opens research lab for licensing

A start-up started telling the world Monday about its idea for predicting traffic jams, even though it wasn't the company that developed the technology.

Rather, the core advances that are launching Seattle area start-up Inrix came entirely from Microsoft's research labs. Though other corporate research labs have for years spun out unneeded technologies to start-ups, the Inrix deal is the first time Microsoft has decided to license out its research know-how.

"We still hope the vast majority of Microsoft Research technology is going to end up in Microsoft products," said David Kaefer, director of business development in Microsoft's intellectual-property group. "Sometimes they come up with great ideas that really aren't part of our core business plans."

And rather than let the good ideas gather dust, Microsoft said, it will look to see if it can put them to good use (and generate some cash) by licensing them out. It's a tack Kaefer said has been used well at places such as Xerox and Bell Labs.

Microsoft is also trying to show generally that it is willing to license its technology to the little guys. The company launched a major intellectual-property licensing effort more than a year ago but has spoken primarily about only a few key deals.

"These deals tend to be with very large corporations--the Symbians of the world, the Nokias of the world," Kaefer said.

But Kaefer said Microsoft also has about a half-dozen people focused on working with start-ups and other smaller companies.

In addition to Inrix, Microsoft announced Monday that it is licensing some of its fonts to Ascender, a year-old start-up based in Elk Grove Village, Ill. Microsoft is also announcing a broad program to license its Windows Connect Now program, designed to let consumers easily set up secure home networks. However, for the technology to work smoothly, device makers need to incorporate it in their products. Kaefer said Microsoft is charging a relatively modest $5,000 one-time license fee for companies that want to use Windows Connect Now.

For its part, Inrix is hoping an exclusive license to Microsoft's technology will help it unclog the nation's freeways. Inrix's product, currently being tested on Windows-based smart phones by 3,000 people in the Seattle area, is designed to offer traffic information by combining a variety of factors such as weather forecasts, construction schedules and historical traffic data.

Unlike competing systems, which primarily base advice on accident reports or measurements of current traffic, Inrix's system is designed to help predict what traffic might be like an hour from now.

"We also tell you when the best time to take the bridge is, when the best time to leave in the morning is," said Inrix CEO Bryan Mistele, himself a former Microsoft executive. Mistele and Inrix Chief Technology Officer Craig Chapman both recently left Microsoft's mobile and embedded devices unit to start the new company.

Inrix does not plan to market the technology directly, but rather license it to companies that sell in-car navigation systems, as well as to TV stations, satellite radio companies or other businesses. Even Microsoft itself could be a customer, though no deal for that is in place.

Inrix has only a handful of employees, but it announced Monday that it has landed $6.1 million in venture funding, led by August Capital and Venrock Associates. The company hopes to expand its service nationwide by the end of the year.

Kaefer said Inrix's approach should appeal to anyone who has sat in traffic in places such as Seattle or the San Francisco Bay Area. Americans typically spend 4.5 billion hours in traffic each year, Inrix said.

"Inrix is trying to make that a little less painful experience," he said.

 

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