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November 29, 2007
Burst, Apple Settle - Nobody Notices?
As I wrote a couple months ago, Robert X Cringely has something of a significant interest in the ongoing demise of Burst. The company has gone from being a tech innovator to a shell that's suing major players in an attempt to recover something. A couple years ago, Microsoft bought patent licenses for $60 million. Apple, potentially a much bigger violator, decided it would rather fight.
Apple and Burst couldn't come to license terms and Apple sued. Last week, carefully hidden in the pre-Thanksgiving rush, the two sides announced a settlement for a mere $10 million. Cringely's 22 Nov column covers the settlement from his own particular angle.
Cringely points out that the timing of the settlement is odd and seems to have been intended to make the story go away quietly. He may be right. I did a quick check of sites like ars technica and CNET, which have covered the Burst story in the past. None have stories up about the settlement, even though I gave them a couple days to catch up.
The next question is why such a small sum - given Apple's dominant position in the digital media selling business it might have been possible to sue them for hundreds of millions in claimed infringement. Cringely also points out that it's odd for companies to downplay a settlement to this extent. Usually at least one side wants to claim public victory.
One possible clue may be the decision earlier this month to dismiss 14 of the Burst patent claims on the basis of "obviousness." Patent lawyers are still trying to figure out what to make of these new standards and Burst may have feared that even though the judge was willing to let the case go forward on the remaining 22 claims, those claims might have been knocked out on various appeals leaving the company not only with no settlement but with no valid patents.
In essence, litigation is always a risky maneuver and Burst may have decided the risk was too big so now was the time to walk away with what they could get.
Cringely's theory is that Burst is trying to clear the decks for its next move, which will depend on issuance of patents covering DVR technology. Burst agreed not to sue Apple on the basis of those patents, which makes TiVo the obvious next target. I guess we'll have to wait for those patents to see what use can be made of them.
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