Feeds

Sony buys in InterTrust DRM technology

Cut-price deal

  • alert
  • submit to reddit

Secure remote control for conventional and virtual desktops

Digital rights management (DRM) company InterTrust Technologies Inc has signed a licensing agreement with Sony Corp to pay InterTrust a $28.5m fee plus undisclosed future royalties to license copyright patents to use in its consumer electronics products. The deal gives Sony rights to InterTrust's 24 existing US patents, plus future rights to the 90 patents that are pending.

Sony, which operates a major recording company and is the world's largest manufacturer of audio-video electronics, has found copyright protection an increasing problem. The advance of digital and internet technologies such as music file swapping has increased piracy by making unauthorized copying easier. The addition of InterTrust's copyright technology should go some way toward preventing this type of abuse.

Sony has also been able to capitalize on InterTrust's increasingly fragile financial position to negotiate a cut-price deal. The DRM supplier closed 2001 with just $8.4m in sales. In business for 12 years, the company once had a workforce of 360 employees. Now it has just 35.

That said, the decision made in early May to jettison its failed DRM software business and look for a buyer for the operation was sound. The unit failed to gather sales momentum because the software was perceived as too niche. For the last couple of years, media companies, which are the main consumers of these types of products, have been looking for full feature media systems such as those offered by IBM and Microsoft. The inclusion of DRM functionality into content management suites is also becoming increasing commonplace, thereby weakening InterTrust's position still further.

The Santa Clara, California-based company is currently looking for a buyer for the software unit and has refocused around technology patent development. It plans to license these patents to third parties making Sony its first customer to strike such a deal. However, it will presumably sue if they don't pay. It is also involved in an ongoing battle with Microsoft over patent infringement. The lawsuit is still pending.

Although restructuring has stemmed losses, the company is still in a critical state prompting speculation that it will sell out to the highest bidder. Despite their fractious relationship, Microsoft is still considered the most likely acquirer. However, InterTrust isn't going to collapse yet. The company has $43.8m in cash and cash equivalents, which at the current burn-rate of $14.4m per quarter, should see it through another three quarters of trading activity at the very least.

© ComputerWire. All rights reserved.

Providing a secure and efficient Helpdesk

More from The Register

next story
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Lords take revenge on REVENGE PORN publishers
Jilted Johns and Jennies with busy fingers face two years inside
Yes, yes, Steve Jobs. Look what I'VE done for you lately – Tim Cook
New iPhone biz baron points to Apple's (his) greatest successes
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Edward who? GCHQ boss dodges Snowden topic during last speech
UK spies would rather 'walk' than do 'mass surveillance'
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.