21st > December > 1999 Archive
TechSearch loses round to Intel in patent case
Intel won a battle against US patent firm TechSearch yesterday. TechSearch last year took action against Intel for allegedly infringing the patent on the International Meta Smalltalk patent. IM was a firm originally under Apple's wing, which developed an emulation mode that Techsearch claimed was infringed on by several of Intel's microprocessors, including Merced. However, a federal judge in California yesterday dismissed Techsearch's claim of summary judgement. It's likely that won't be the last we've heard of this case, however. Techsearch originally sued Intel for $2 billion over infringement but upped that to $8 billion. Intel has said that the case is "without merit" but must have been slightly worried, because it created a Cayman Island shell company to try to buy the patent when it was up for grabs... ® See also Merced, Pentium patents threatened in $8 billion suit Intel's IA64 programme threatened by IMS patent Meta Smalltalk patent spat assumes Merced meaning Intel, Teachsearch, IMS case takes further twist
Via-S3 deal would make Intel dead grumpy
Forbes Online is reporting that graphics company S3 is in merger talks, with Taiwanese firm Via the suspected suitor. The magazine reports that Lehman Brothers is currently brokering a possible deal, but the probability is that if Via is interested, it does not want the whole of S3's business, but just its graphics chip business. Yesterday, S3 bought Number Nine, a contractor which supplied its own parts to IBM. However, chip giant Intel might well have something to say if it looks as though Via might snap up the S3 business. It could look at acquiring the S3 chip division itself, if only to prevent Via, about which it is intensely paranoid, from further expanding its ambitious plans to fight Intel. According to the Forbes article, neither S3 nor Via would publicly comment on the rumours. ®
MS votes for InterVU with $30 million
Microsoft is investing $30 million in InterVU, a San Diego-based developer of streaming audio and video, the idea being to incorporate the technology in the Windows Media platform. InterVU says its ambition is to bring 100 Kbps to 1 Mbps broadband into the mainstream, but the reality is that for most of the world, broadband is far into the future. The financial arrangements dictated by Microsoft are pretty stringent: the investment will be for a new class of preferred stock that can be converted to common stock at $90, which was said to be at a 27 per cent premium above the previous 20-day average closing price. But the share price drifted up significantly just before the deal was announced. It was clear that the shares would zoom upwards after announcement, and indeed they did, closing yesterday at $114.875. Microsoft also demanded a five-year warrant to purchase 60,000 common shares at $90, so its theoretical position is that it got back nearly $10 million yesterday as a result of the increase in share price. It was not disclosed whether InterVU would just happen to opt for Windows everywhere, although Gates hinted at the need for additional software in a speech to the Streaming Media West conference earlier in the month. Related deals include one with General Instrument to use Windows CE in set-top boxes for streaming video and audio; another with Thomson Multimedia to put Windows Media on RCA Lyra portable music players; and a third with Texas Instruments for processors to convert audio and video to digital. Microsoft now has approaching 50 partners for what it calls its Windows media broadband jumpstart. There's an interesting little fact probably related to the Microsoft deal: InterVU was granted "a key patent" (US 6,003,030) for the delivery of audio, video, text and graphics to end users from the electronically closest server on 14 December. Could Microsoft have conditioned the deal on the granting of this patent, because that was the prize? An earlier patent (US 5,956,716) granted in September is entitled "System and method of delivery of video data over a computer network". Microsoft is not the first megacorp to take an interest in InterVU: CNN plonked down $20 million for an equity stake last month, but for common stock. Part of the deal was that CNN gave InterVU some on-air and online advertising for three years, in return for which InterVU would sub-license CNN's domestic TV networks for its corporate clients' LANs. InterVU also provides fee-based Internet video. InterVU had 1999 revenue of $3 million and losses of $7 million, but cash and short-term investments of $115 million, which tells an interesting tale of the potential of the company. ®
Ask Jeeves – about MS and MIT patents…
If you go to Microsoft's "Ask Maxwell" Web page and ask: "Do you by any chance know a chap called Jeeves?" you get the response "I know the answer to this question: click the 'ask' button next to it." Clever, you may think, until you discover that Netscape Navigator elicits the answer "(Carrier Detect) CD" while IE gives "Challenge Handshake Authentication Protocol (CHAP)" It seems that these allegedly intelligent agents are not so intelligent after all, and that Maxwell is a man with an attitude to where questioners are coming from. Microsoft uses Ask Jeeves' corporate question answering service, which is apparently confined to Windows 98 at present although the Web page does not indicate this. But there's another issue looming: Microsoft ("we must be allowed to innovate") could find itself the object of an unwanted legal action, since Ask Jeeves is being sued by two MIT academics, Patrick Winston and Boris Katz, who have filed suit in the Boston District Court alleging that Ask Jeeves has infringed two of their patents. The company claims its technology was developed in-house, and says that the suit is without merit. It is also licensed to AltaVista, now majority owned by CMGI, but it looks as though AltaVista doesn't fear any legal action as it filed its $300 million IP with the SEC on Friday. Microsoft is also thought able to bear the financial burden of another legal action. One of the patents at issue is US5404295: Method and apparatus for utilising annotations to facilitate computer retrieval of database material. It's hard to see what is patentable from the abstract, so maybe the academic duo will find the validity of their patent being questioned by the US Patent and Trademark Office at the request of CMGI and Microsoft: "A method and apparatus for computer retrieval of database material which may be text, computer programs, graphics, audio, object classes, action specifications or other material which may be machine stored. Annotations are provided for at least selected database subdivisions, preferably with natural language questions, assertions or noun phrases or some combination/collection thereof. However, the annotations may also initially be generated in a structured form. Annotations are, if required, converted to a structured form and are stored in that form along with connections to corresponding subdivisions. Searching for relevant subdivisions involves entering a query in natural language or structured form, converting natural language queries to structured form, matching the structured form query against stored annotations and retrieving database subdivisions connected to matched annotations. The annotation process may be aided by utilising various techniques for automatically or semi-automatically generating the annotations." So if you bung some text into a database, assign some index terms, then parse the text, index terms and questions, shove the results into some search engines, and then show any correlations, watch out for communications from Winston and Katz's lawyer, Robert Birnbaum. The academic duo work in artificial intelligence at MIT, but who provides the funds for their salaries you may ask? We didn't chance this one to Jeeves or Maxwell, but did note that Microsoft announced in October that it was investing $25 million in I-Campus, a collaboration with MIT to develop educational technologies (and unkindly dubbed MSMIT, which is believed to be an allusion to the Microsoft NBC collaboration). So far as patents are concerned, there is of course an agreement whereby Microsoft either gets a royalty-free licence or owns the patent, depending on whether the work was done at MIT or Redmond. So is this all embarrassing? Perhaps it would be best to ask Jeeves, or Maxwell. Or perhaps not, on second thoughts. ®
Nader slams MS pricing, licences, demands Office ports
Ralph Nader, the consumer advocate who brought General Motors to its knees over car safety failures ("Unsafe at any speed"), has been talking and writing about Microsoft's "poorly designed products" that were "prone to crash" at the Bazaar, an open source software event in New York. He drew attention to the narrowness of the DoJ case, which ignored "a plethora of issues" relating to the desktop monopoly, MS Office, and licensing issues. Nader has previously arranged two conferences on Microsoft which focussed public attention on the company. Nader is much admired by Microsoft president Steve Ballmer's mother, who was concerned that her son was doing something that was criticised by her hero. Nader's first concern was pricing, where Microsoft had increased OEM prices and charges more than three times the price of BeOS. He also brought up the restrictions in Microsoft's end user licence agreements (EULAs) which often don't allow Microsoft products to be sold or transferred to another PC. Those who prefer Linux often find they had to pay for Windows, even if they did not require it. It is worth noting that Nader's organisation does practice what it preaches in that it uses Linux in its offices. Jay Sulzberger of LXNY announced at the meeting that there would be a Windows Refund Day organised in New York, and since Microsoft had been unresponsive, they were going to court about Microsoft's failure to abide by the terms of its EULA, which state that "If you do not agree to the terms of the EULA..." the PC manufacturer (for OEM versions) or the dealer (for a retail version), would provide "a refund". Those who have tried have found obstacles like tank traps and minefields along the road to the promised refund. Even if the user does not want Windows (or other bundled software), the OEM usually has to purchase the licence from Microsoft anyway, Nader noted. Another issue concerns the number of copies of Windows that consumers are liable to purchase, and the upgrade fees to keep it working in the face of deliberate tricks used by Microsoft to keep users having to buy more. Nader also drew attention to the monopoly position of MS Office, although he didn't mention that the States had revised their Complaint in the joint case against Microsoft by removing claims about Office monopolisation, presumably because the DoJ did not want the combined case to be too long. So far as non-pricing issues were concerned, Nader was concerned about the constant crashing of Microsoft products, and the apparent disabling of dozens of third-party multimedia programs. He also noted how Microsoft had decided to make the running on any non-Microsoft browser "a jolting experience". The "forced migration to Microsoft's Johnny-come-lately imitations" harms consumers and lowers profitability. He concluded his talk to the hackers and ageing automobile-safety activists by commenting: "We recognise that in software markets, there may be cases where the market coalesces around a single product with a large market share. But it is one thing for that decision to be made on the basis of competition for consumer satisfaction, based upon product quality and price, and something else when consumers are forced to pick Microsoft, by an endless array of underhanded, coercive and non-meritorious tactics. Consumers are harmed when there is no real choice, except to succumb to the Microsoft Borg." Nader also wrote an article for Legal Times with his associate James Love, who directs the Consumer Project on Technology and who also happens to be a cousin of Ransom Love, president of Caldera. His theme was that the debate about Microsoft should be wider than the narrow confines of the antitrust bar, with a public debate to ensure greater competition and consumer choice. It was refreshing to find some plain speaking about Microsoft's business ethics: "Microsoft can't be trusted. The past six years have demonstrated that Microsoft cannot be trusted, and one should not predict that Microsoft will carry out any settlement in good faith. The company's conduct during the trial itself was the best evidence. "When the judge ordered Microsoft to offer OEMs a version of Windows that did not include the company's Internet Explorer browser, Microsoft served up an outdated 1995 version of Windows that wouldn't even work with modern PC hardware. If Microsoft was willing to insult a federal judge in the middle of an antitrust proceeding, it's likely to be pretty bold after it enters into a consent degree." Nader and Love have four remedies in mind for Microsoft. The first is to reform OEM licensing by means of non-discriminatory licensing of Windows for OEMs, and they would also like changes to MS Office licensing too so that the product cannot be tuned to embed proprietary technology into Web documents. This of course implies a published price list. Breaking up Microsoft is favoured as their second remedy because of Microsoft's determination to resist any imposed change, with IE being a separate divestiture to make possible competition in the browser market. The third remedy is to fix compatibility problems, although making the Windows code available publicly would not go far enough they suggest. Love has previously argued for the kind of remedy that was used by the EU from 1984 against IBM, following the collapse of the US case under the Reagan regime. IBM was found guilty in Europe of abuse of a dominant position, but it took nearly five years for an international advisory committee to propose ways of dealing with software bundling and the over-slow provision of interface specifications for hardware. The novel result however was that any American or Japanese company wishing to sell into the EU market could legally require IBM to provide critical information that would make competition possible. What Love is hinting at is that if Microsoft is not properly dealt with in the US, then the EU should take immediate action in a regulatory regime that is more streamlined and potentially tougher than that of the US. Richard Stallman, the founder of the modern freeware movement, is concerned that Microsoft will use patents in an undesirable fashion, as it has mentioned in its internal documents, and wants Microsoft to be prevented from using them other than defensively, possibly in conjunction with a mutual-defence polling agreement with other software developers. Rant on: Stallman is right, and this is a very important issue indeed. Software patents issued by a maverick patent office, such as the US Patent and Trademark Office, should be overturned, and in the interim, they should not be recognised elsewhere. The European Patent Office shows signs of similar weakening towards software patents in the face of pressure from corporate patents lawyers desiring to lock-up intellectual property that properly belongs to the world, and not to corporations. The Association for Computing Machinery never envisaged that the algorithms it published be patented, for example, and nothing has changed. It would be a good if WTO member states negotiated that if the US wants TRIPS (the trade-related aspects of intellectual property rights) to be extended, it should reign-in its abuses of intellectual property patenting. Rant off Nader and Love's last remedy concerns porting to new platforms. They want the new owner of MS Office to be obliged to release simultaneously new versions of Office on two platforms other than Windows and Apple. Apart from abundant opportunities to sabotage the versions for other platforms, this is in some ways like licensing and encouraging a monopoly, and likely to result in talking paper clips, as well as entrenching Office, and discouraging competition. It would be far better to disallow any bundling of Office by OEMs, and for some major users like governments to insist on standards for data transfer that effectively prevented Microsoft from the abuses we have seen in the past. As Nader and Love make clear, it is important that remedies address the future, so that competitiveness and real innovation can flourish. There are two long stops on the trial: the States have been considered to be a stiffener to strengthen the DoJ's resolve, as well as having their own concerns. But the ultimate long stop is the European Commission: but can we be reasonably sure that it will act swiftly and decisively? Unfortunately, there is real cause for concern. ®
Big Q's petition to FTC on Alpha might well fail
The shenanigans at Compaq earlier this year when it withdrew its support for Microsoft NT and Win64 on the Alpha platform is likely to have a negative effect on an attempt by the firm to alter a FTC consent agreement. Last week, Compaq asked the US Federal Trade Commission to remove an element from the agreement which required Digital (now Q), to license Alpha technology to IBM, AMD and other chip firms. However, it is likely that the FTC may say no to Compaq's request, because this element of the consent agreement it brokered between Intel and Digital was put in place to ensure competition between x.86 and Alpha microprocessors. Terry Shannon, editor of influential newsletter Shannon knows Compaq, said: "AMD is giving Intel a serious run for the money with the Athlon. And that might that something to do with the technology it shares with the Alpha." Because of that, said Shannon, the FTC is likely to look at the wider implications of the clause for AMD's continuing competition and reject Compaq's request. He added that Compaq is somewhat upset that AMD, which licensed the EV6 system bus, scuttled its plans to make Slot B Athlon chips. "Since there's no real pro quo for the quid, it would not be in Compaq's best interests to share additional Alpha technology, not to mention an outright architectural licence, with AMD." ®
Big Q to roll-out BTO for direct buyers
Compaq is reported to be in talks with distributor Inacom over build-to-order PCs for the vendor's direct customers. Analysts claimed Compaq, which kept Inacom in its stable of US distributors after its channel cull in April, is considering buying the ability to tailor-make PCs. According to today's Wall Street Journal, the two US companies were said to be in a pow wow over a deal that would let Compaq take over some of Inacom's assembly and distribution operations. Inacom, which already customises Compaq PCs for its own customers, would expand its own build-to-order business to companies buying direct from Big Q. Two weeks ago Compaq admitted its supply chain wasn't working and ditched its channel-only policy for volume sales in the UK. Inacom marketing vice president Geri Michelic said that, while the companies were regularly in discussions, "at this point in time there is no new relationship brewing". Compaq CEO Michael Capellas also refused to confirm any talks. ® Related stories: Distributors cut to quick by Compaq Dell eats into Compaq's European sales
Clinton throws his weight behind online Christmas shopping
Womanising US President Bill Clinton went on an online spending spree yesterday to buy some last minute Christmas gifts. The self-confessed internet virgin hooked onto the Net using a Compaq laptop computer from the comfort of the Oval Office in the White House.
New UK MD named for HP
Christmas has come early for Hewlett Packard and with it comes a shiny new UK chief. Phil Lawler, previously director and general manager at the vendor's enterprise computing sales organisation in the UK and Ireland, has been named as the new UK managing director. He will replace John Golding, who at 57 is to retire from the post of MD. Golding will, however, stay on as chairman until March 2000, the company said. HP will not be stretching to a replacement for Lawler as head of the enterprise business - he will be expected to perform these duties on top of those of UK MD. Lawler said he aimed to grow the UK business, which currently tops £2.2 billion turnover. ® Related stories: HP merges five sales forces worldwide HP turns in fat profit for Q3
Win2000 to fuel Taiwan memory growth
A bright future is being predicted for Taiwan's DRAM makers as the industry emerges from a three year slump. "Next year will be very good for the DRAM business, simply because demand will be much higher than supply," said Hander Chang, assistant vice president and spokesman for Winbond Electronics. Winbond, Taiwan's largest DRAM maker, holds roughly 5 per cent of the global market. DRAM memory chips are used in all personal computers, and in many other electronic devices. Taiwan currently holds around 12 per cent of the worldwide market, which was worth over US$16 billion this year. In 2000, with global market value expected to exceed US$20 billion, Taiwan's share will rise above 20 per cent, analysts say. "I expect the DRAM industry to see significant growth for the next three years," commented industry analyst Eric Wang of ABN Amro, Taipei. "All the producers will benefit from an upturn in the cycle. In the short term, however, in the next three months I see a lot of pressure on the price." "DRAM is supply driven industry and a lot of new supply will come into the market in the next three months," he explained, "However, the price will come down but not collapse." Wang believes that manufacturers will hold extra inventory during the next few months, and will use it to even out dramatic price swings on the spot market. Some analysts predict that ongoing stockpiling of memory chips by companies concerned about possible Y2K problems could lead to a slump in orders in the first quarter, traditionally a period of low demand. Winbond's Chang sees potential problems later in the year, however. "The end of the second quarter, maybe April or May might be a little bit slow," he said, "but after that, we think there will be high demand." The release of Microsoft's Windows 2000 operating system, expected early in 2000, will help drive DRAM sales. "Windows 2000 will have positive influence," said Chang, "you need more DRAM to support all its features." Microsoft will probably recommend a minimum of 128 Megabytes of memory for PCs which use Windows 2000. DRAM Production is dominated by Samsung and Hyundai of Korea, and Micron Technologies of the US. Between them, these three companies produce about 70 per cent of global output. Taiwan's DRAM makers will benefit next year because, unlike Samsung and others, most have steered clear of the troubled Rambus memory format. Rambus, long touted by US chip giant, Intel, as the future memory standard, has been delayed by technical problems, and is not expected to become dominant before 2001. The global memory chip market will grow 33.5 per cent next year, according to Semico, a US research organization. ®
Dell customers delayed at Caminogate gulch
Customers who ordered Dell Dimension XPS B systems as soon as the company made them available have been told they'll have to wait a bit longer to play with their Rambus compliant toys. A reader who placed an order for the machines, which support the Rambus memory set, and, according to the Dell web site, Pentium IIIs now up to 800MHz, is still waiting. He said: "I placed an order for a Dell XPS "B" computer on the 16th of November. That was the day after it was announced that Camino systems were available. The original ship date was suppose to be the 17 December." But, he says, Dell has now told him that shipments of the systems will not be until the second week in January, a full two months after he first placed the order. Dell has similar problems to other PC manufacturers, in that there is a shortage of Intel Coppermine processors, coupled with a dearth of RIMMs to populate i820 motherboards. According to some reports, Intel was only able to ship around 1.5 million Coppermine processors in this quarter, a fraction of the parts that the industry wanted. Yesterday Intel announced it was shipping 800MHz Pentium IIIs, but Pentium III 733MHz chips and other flavours of its .18 micron Coppermine chips are still very thin on the ground. Dell was not available for comment at press time. ® * A reader has pointed to a document on the Intel site concerning the errata in Pentium III that mispells "floating point" as "gloating point".
Bastard Operator From Hell joins The Register
Simon Travaglia, the brains behind The Bastard Operator From Hell (BOFH), has selected The Register for the online return of his classic cult sysop-as-saboteur column.
Intel's 1GHz bent promises
Back in February, we met Pierre Mirjolet, architecture marketing manager at Intel EMEA, who talked about Intel's .18 micron process and showed slides demonstrating a 1GHz chip by the end of this year. Intel has not, so far, demonstrated such a beast apart from as a technology demo, but Mirjolet suggested that 1GHz Pentiums would be sampling by February next year. That now seems inconceivable. As we exclusively reported last month, Intel will demo an IA-32 1GHz part at a conference next February, but that's a long away away from providing samples. It just goes to show that things do not always pan out the way Intel expects. In other respects, Mirjolet's statements were spot-on, however. He said that Coppermine .18 micron parts would first start to appear in June this year, and by the end of the year there would be 600MHz Pentium III Coppermines. And Intel's plans to migrate its fabs from .25 micron to .18 micron technology have also motored quicker than expected, probably because of the spur that AMD applied with its Athlon. According to reports on bulletin boards, Intel engineers are attempting to reverse engineer the Athlon and are well aware that AMD can produce such a beast by now. See also Intel to demo 1GHz chip by year end Intel's plans for 1GHz processors (slide presentation) Intel to demo 1GHz IA-32 in February
Goldrush town to give itself DOTCOM moniker
The Gold Rush town of Halfway is to rename itself half.com, in an attempt to revive its flagging fortunes. According to Associated Press, the seven elders of the town have agreed to change the name of the town to HALF.COM, after discussions with a Philadelphian entrepreneur.