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Tuesday, March 01, 2005

Microsoft in violation of patents on Windows Media?

“(Is) Sony and Philips considering round two with Microsoft over codecs?”, asks ReThink.

If you were Sony or Philips and you found that Microsoft had been not just using technology that you invented to invade your markets, but had been giving it away, would you want to sue or negotiate?

Seems Microsoft’s WMV may be liberally taking components of MPEG for use without paying for the intellectual property. I know I wouldn’t like that if I were Phillips.

This is certainly worth a read since, if you follow the logic they’re employing, it could mean billions and billions in potential damages:

Damages might be estimated in two layers - one based on how much benefit Microsoft has got out of giving the media player away, and the other on how much loss of business the $200 billion-a-year Consumer Electronics market has suffered because of this.
Assuming that 400 million devices carry the codec now and that, over the past decade or so, the total number of devices that have carried it, including obsolete and discarded ones, was close to 1 billion, then that might be the multiplier for the first set of damages. An MPEG 2 license costs $2.50 per copy, so assuming a similar licensing regime, that could mean that this act should have cost Microsoft $2.5 billion in licensing fees.
If perhaps the same amount again was lost by the collective CE firms in missed sales (not to mention what putting a free codec on a PC has done for piracy) then perhaps this doubles the fee to $5 billion. Apply triple damages?

So - if this is the case, or even remotely the issue, then MS will have to either charge for a license, a la QuickTime Pro, or absorb the costs internally. Either way, it’s gonna be painful.

(hee hee!)

Read the entire article at ReThink