International
Microsoft pays $60 million in patent-infringement claim
By Finfacts Team
Mar 12, 2005, 11:57

Since its founding in 1988, burst.com has pioneered the development of Faster-Than-Real video and audio delivery. burst.com has built an international patent portfolio covering bursting, video delivery scheduling and rapid casting.

Burst had charged that Microsoft had met with it over a two-year period and negotiated unsuccessfully for the rights to use Burst’s innovative technology. Burst also said in 2002, that  Microsoft’s newly announced “Corona” product used technologies and trade secrets misappropriated from Burst.com. These proprietary technologies were protected by numerous U.S. and International patents (and patents pending).

The patent infringement case against Microsoft was due to be heard in Baltimore, Maryland yesterday.  

"While we were confident of prevailing in this lawsuit, we have been open from the beginning to finding a reasonable way to resolve this case," Tom Burt, a Microsoft vice president and deputy general counsel, said. "Securing a license to the Burst patent portfolio through this settlement allows us to focus on the continued development and deployment of Windows Media technologies."

In the joint announcement, Burst said that the licensing agreement validates Burst patents as pioneering intellectual property.

Richard Lang, Burst's Chairman and CEO said the company "spent over a decade developing and patenting the technology in anticipation of the markets that are now emerging."

The following is a transcript of Burst.com's statement on the settlement:

Burst.com and Microsoft on Friday announced that Microsoft has taken a non-exclusive license to Burst’s international patent portfolio, for a one-time license fee of $60 million dollars. The license is for use only by Microsoft in its own product and does not include sub-licensing rights. The patent license also settles the outstanding litigation between both companies.

Burst stated that while the patent license resolves the litigation with Microsoft, it also validates the Burst patents as pioneering intellectual property in the field of media delivery.

Richard Lang, Burst CEO, said that Burst intends to use the net proceeds from the license to Microsoft, after attorneys fees, in primarily 3 areas:

1. To payoff, or reserve for, its current and long term liabilities (approximately $2.8 million), which includes promissory notes (secured and unsecured), outstanding payables, debts to former employees of the company and all accrued salaries and bonuses.

2. To Reserve a sufficient amount of operating capital to launch a vigorous ongoing enforcement of its patent rights against all infringing parties, as well as pursuing software licensing and other avenues available to the Company to maximize the return to Burst shareholders.

3. Distribute a substantial portion of its funds through a cash dividend to its shareholders of record. The dividend per share and date of record will be announced at a subsequent date.

Burst said that when it is available, it will publish the settlement agreement and Microsoft patent license on its website, www.burst.com, except for any confidentiality provisions which may exist.

We spent over a decade developing and patenting burst technology in anticipation of the markets that are now emerging. With this action behind us, the company will now focus on its other important opportunities. We would like to thank the many supporters and contributors who helped us make it to this exciting juncture.” said Lang.