Microsoft would not simply seek a license to technology that's part of their future Xbox plans. To control cost and use of the parts in their platform with the ideal of minimal dependency on outsde influence, they would need to seek some extent of ownership where ever possible. This put them in the position of being infringed upon by Sony. Although this was an eventuality of neutral business ethic, it's of course reasonable that they'd be happy to gain competitive leverage against Sony.
Immersion win $82.0m from SCE, prohibition of PlayStation near?
- Thread starter cja
- Start date
Sony was not legally compelled to obtain the technology rights in their case, but Microsoft was. By contrast, Sony specifically sought out that ownership deal in the first place. If premeditation is someone's personal standard for unscrupulous behavior, then that's it.
Lazy8s said:
So you believe that Phillips and the other silent partners conspired with Sony to buy out Intertrust during the MS lawsuit? Even though DRM is a technology that Phillips et al would have had to go after eventually? Interesting.
Lazy8s said:
Hmmm ok let's revisit one of your earlier comments while I ponder the above:
MS was not legally compelled to obtain the tactile feedback rights as the license is used by console and PC 3rd parties to create feedback devices. MS was not forced to obtain those rights to protect their interests they had no interests at the onset of the lawsuit.
MS didn't license or seek ownership at all...until sued. So you're being more than a little presumptuous about what MS would and wouldn't do. But, back to the point, MS had to be coerced into even considering licensing in the first place, nevermind investment. Allowing them to simultaneously benefit from a similar infringement suit that completely pre-dates any licensing, investment or intent to do either on MS's part accords MS a far better status as partner than they deserve in this case.Lazy8s said:
DarienA:
kaching:
However, your ethic standard which decries the taking advantage of a pre-existing lawsuit judges Sony's actions in the Intertrust case as deplorable.
Of course they were. They were being sued.
kaching:
Exactly, therefore their opportunity was only incidental and not planned.
No presumption. MS didn't think anyone else had claim to that technology they were using in the Xbox until Immersion made claim, so there was nothing to seek.
Along with ownership of the technology for Microsoft came Sony's persisting threat to the IP, so settlement from Sony became their entitlement.
However, your ethic standard which decries the taking advantage of a pre-existing lawsuit judges Sony's actions in the Intertrust case as deplorable.
They were forced to secure the rights to technology being used in their Xbox, so they sought ownership of that technology. By joining ownership of it, they inherited Sony's continuing threat to the property and had to rightfully see to the maintenance of the litigation for stopping that threat.
Lazy8s said:
You must have misunderstood the question, perhaps I did not word exactly what I was thinking correctly. Why was MS forced to acquire Immersion to secure rights to this technology rather than simply license the technology like the whole host of other folks listed as partners at Immersions site? Lockheed Martin is an OEM partner... then you have folks like BMW, Samsung, etc.
D'ultimate
Member
Other that the fact that it affects Sony, what's wrong with MS seeking ownership in a company that has the companies listed as partners at Immersions site using that technology? Some would say that with companies like Lockheed Martin, BMW, Samsung, etc using a technolgy that it would be a wise business decision.
Still there are others such as DarienA that would see Sonys comparable business decision as far less deplorable.
Still there are others such as DarienA that would see Sonys comparable business decision as far less deplorable.
The control for cost and use that Microsoft would want over technology they're including across millions of units of product and plan to include across millions more for years into the future is a lot more than is granted in a simple license. They couldn't afford to be at the mercy of licensee terms and potential renegotiation by Immersion sometime down the line, so they would seek ownership in the technology. Microsoft also then couldn't afford for Sony to outlast or outmuscle Immersion in the court proceedings defending their IP, so a MS investment into Immersion served both partners' interests with capital for the smaller company and control for the bigger.
Lazy8s said:
Good answer but I have a problem with it. "They" couldn't afford to be at the mercy of licensee terms and potential renegotiation. They being MS the company with such a huge cash hoard as part of its profits that they have no problem snapping up any company that is a competitor, regardless of the industry, and the same company that has settled hundred's of millions of dollars in lawsuits previously.
They couldn't afford to be hurt by renegotiations that might force them to pay more down the road?
That's not a compelling argument at all.
BMW and Lockheed don't use the same technology across millions of units of products? Did MS buy the folks who supply the chips that power the Xbox? Nope... actually refresh my memory... what happened with that arbitration attempt to renegotiate the cost of those chips anyway?
Part of your answer is right looking at the lawsuit they did decide that control would be great, but they certainly weren't force to buy Immersion, just like they certained weren't forced to to word the terms of the Immersion/Sony lawsuit in to a clause describe exactly how funds would be exchanged etc.
Opportunity knocked they answered, but they weren't dragged kicking and screaming saying noooo to it.
As you said this was about control. I could care less about the acquisition MS has acquired company's that were competiting in industry's that it wanted to enter/dominate before, I just find the terms as reported in the quarterly report to be incredibly shitty. That's all.
D'ultimate
Member
The method might be suspect, I agree. But not anymore suspect than any other major corporation including Sony, as demonstrated by a few others here, is capable of.
The only difference is your opinion of said companies.
D'ultimate said:
How so? When the Sony fake movie reviewer flap happened everybody thought it was a pretty bone-headed move of Sony to pull.
And you again misunderstand. I don't have trouble comparing the Sony/Phillips acquisition of Intertrust to MS acqusition of Immersion. Company's snap up other company's when they come under their radar for different reasons all the time.
It's the public disclosed terms that I thought were... unruly.
D'ultimate
Member
So your saying that you just have a problem with MS because their contract info was disclosed to you. But...you don't have a problem with Sony/Philips because your not aware of the wording of their contract. Even though on the surface it's pretty much the same thing, if not worse on Sonys' part.
D'ultimate said:
http://www.investor.philips.com/reports/04_QR1_i/performance/subsequent_events.html
"On April 12, 2004, Microsoft Corp. and InterTrust Technologies Corp., in which Philips owns a 49.5% stake, announced that Microsoft has taken a comprehensive license to InterTrust's patent portfolio for a one-time payment of USD 440 million. The agreement resolves all outstanding litigation between the two companies. InterTrust receives rights under Microsoft patents to design and publish InterTrust reference technology specifications related to digital rights management (DRM) and security. Microsoft and InterTrust believe this agreement will accelerate adoption and development of DRM technologies.
Following this agreement, Philips expects to report a net gain (after costs and taxes) of approximately USD 100 million in Q2 2004."
Seems pretty straightforward.
http://www.hoovers.com/free/co/secdoc.xhtml?ipage=1964641&doc=0&attach=on
I had a few more documents but I closed the damn window.. I'll see if I can track them down again.
Here we go, all of Intertrust filings around that time period:
http://www.hoovers.com/intertrust-technologies/--ID__59801,Page__1,Sort__D--/free-co-sec.xhtml
I can't even find mention of the lawsuit in the acquisition report. Hold on though I'll check a quarterly to see if I can find direct reference to the pending lawsuit.
The biggest problem I have is that the acquisition of Intertrust by Sony/Phillips was as much a swipe at RealNetworks as it was at anyone else DRM being used to secure media distributed online.
Intertrust first sued MS in April 26, 2001 then added additional claims in October 2001. The Sony/Phillips acqusition didn't happen til Fall of '02, MS settled in April of this year('04). Doesn't seem as close as a few people have painted....
AND in terms of reinforcing my believe that MS could afford much of anything these days remember that they settled the Sun lawsuit for 1.95BILLION.
The Immersion lawsuit would not have netted Immersion even close to that much from MS. If MS had gone the traditional route of simply fighting the license and/or simply licensing the tech.
Round and round we go! You're missing the point of why this is important. I'm not seeking to advance a conspiracy theory. I'm suggesting that the "opportunity" you refer to should simply be forfeit due to the conditions under which it was pursued by MS.
So, umm, how do you _know_ that "MS didn't think anyone else had claim" if you're not presuming?
Questioning the ethics of one indictee being allowed to turn around and immediately make specific preparations to benefit from a settlement against a fellow indictee is not the same thing.
DarienA:
Rich companies stay that way by being careful about their money.
If they're so characterized with aggressive tendencies, then going after ownership as opposed to some simple license is just the thing they'd do.
Never imagined they were anything but happy to be presented with a competitive advantage.
As conduct of business, MS would have to outline, in specific writing as to how it would be ensured, Immersion's committment to the continued pursuit of Sony's threat to their joint IP.
kaching:
MS has to have Immersion compelled to protect their property under contract, and they are entitled to some of the settlement money after inheriting the responsibilities and the benefits of the ownership they purchased as a sublicensor.
To have rights over a patented technology, they would've had to secure it (and have ownership if they wanted to control costs and terms of use for future plans).
Being guilty of an infraction does not strip away one's right to receive reparations as a victim of such an infraction. Those rights were inherited along with the costs of becoming a sublicensor.
That license included their terms of ownership and of making them a sublicensor. The reason the deal was so expensive was because it wasn't just a simple license.
Lazy8s said:
Yeah that 1.95 billion settlement with Sun was definitely being careful with their money. Conclusion MS wasn't FORCED to do anything, their corporate nature has long been to acquire and push the envelope when attempting to damage their competitors, and this is just par for the course for them.
No, they don't "have to", Lazy. The license's are still largely Immersion's and there's no evidence they would suddenly lose the will to protect their own property. It was Immersion after all who served two of the world's largest companies with patent infringement lawsuits in the first place. It's superfluous for MS to think they need to compel the same course of action.Lazy8s said:
You're off on your own with this comment - it has nothing to do with what you were responding to.
Of course, for future infractions, not pre-existing ones.
Again, the way the settlement agreements are itemized suggests that the 19.9 million was just for the world-wide irrevocable license. Sublicensing was accorded to them separately with no monetary payment attached to it upfront and and partial ownership came strictly through the $6 million in shares they purchased.
kaching:
In business, companies write out all expectations and commitments of a deal in contract.
The size of Microsoft's stake is not relevant to their execution of sound business conduct.
Execution of sound business conduct does not take chances with likelihood. Small companies are outmuscled or outlasted by larger companies in litigation all of the time. Case in point, Sony vs. Bleem! -- whether they had a defense or not, Bleem! eventually couldn't afford to take it all the way in court.
Sure it does. The statements with which you took issue weren't presumptuous of Microsoft's strategy when Microsoft's actions (sought ownership as opposed to just a license, included technology without seeking a license for it and then later changed course to obtain a license for it) had outlined that strategy.
The law doesn't stop applying under any circumstance.
The results from "a series of agreements" are itemized generally, not with respect to any distinctions or interdependencies between the agreements. Sublicensor status was actually listed for a cost of $0.1 million, which obviously shows interdependecy between its granting and the granting of the worldwide royalty-free, irrevocable license since they add up to an even $20 million. The negotiations were not bartered in such a way that Microsoft received only the worldwide royalty-free, irrevocable license; the dealings resulted in a whole series of connected agreements.
