Burst.com vs Microsoft
p2pnet.net News:- Burst.com, a small software company that’s filed a patent violation and antitrust lawsuit against Microsoft, wants a deposition of Bill Gates to be released publicly .
Burst’s chairman and ceo Richard Lang says Microsoft’s Corona streaming media product uses technologies and trade secrets “misappropriated from Burst.com”.
Lang claims Burst technology is essential to Microsoft because it enables high quality video-on-demand online, which is key to Microsoft’s .NET strategy via Windows Media Platform applications.
“Microsoft clearly sees high-quality video and audio delivery as their ticket into dominating the Internet-video enabled set-top box market, as well as the Internet appliance market,” says Lang.
“Burstware is the ‘3rd generation streaming’ technology that Microsoft has been bragging about as if it was their own.”
A lot of people are following the case closely, and none more so than John Grey, a computer consultant and web designer.
Now read on >>>>>>>>>>>>>
Second Act of an Internet Play: the Fall and Rise of Burst.com
By John Grey
Burst.com was once a thriving company developing and marketing software to deliver audio / video streams over the Internet, accumulating world-wide patents along the way. Its Burstware technology, often referred to as Faster-Than-Real-Time-Streaming, relies on proprietary compression algorithms and transmission bursts to protect end-users from changing IP network conditions.
‘Bursting’ is fundamentally different from HTTP streaming in so far as it relies on comprehensive, network-centric optimization with fail-over protection (visit Burst.com for a detailed discussion of the technology, including white papers).
And investors responded favorably, as was so often the case in the late nineties.
When the share price dropped from $8 to $2 in October 2000, I started buying shares, confident that Burst.com’s technology would eventually prop the price back up. Like many other investors in this new century, I decided to average down and purchased more share as the price declined steadily to four cents in August 2003.
Since due diligence is advisable both when buying and selling, I decided to call the company to determine if there was any hope left! It quickly became clear that Burst.com was no longer a viable concern. Indeed, when I asked if they were going to support the existing products, I was told they were looking for somebody to provide services on a contract basis.
As Microsoft’s Media Player had become such a dominant product, I concluded it was better to sell and accept the loss. Very disappointing, but certainly part and parcel of investing.
And that’s when a simple oversight turned a bad investment into a potential gold mine!
I forgot to delete the ticker symbol from the list of stocks I monitor.
In June 2002, I noticed an unusual surge in volume as the price jumped to fifteen cents. There was news! Burst.com was filing a lawsuit against Microsoft claiming that Microsoft had misappropriated their technology during the course of negotiations and engaged in anti-competitive behavior. The appeal of my initial investment in Burst.com, their portfolio of patents, had reemerged. A few clicks later, I had once again taken a position in the stock (which trades on the Pink Sheets, ticker symbol: BRST or BRST.PK).
Well, that was a sudden, almost emotional, investment decision over two years ago. But court developments, albeit very slow, have confirmed that the issues at stake are enormous and the final consequences may be dramatic, even for a company the size of Microsoft.
First, consider that Media Player is at the core of Microsoft’s new business initiative.
Rather than a simple plug-in distributed free of charge, it’s at the core of the company’s new TV on the Web product suite. Already used in test markets in Switzerland, it’s well on its way to becoming a major weapon in the arsenal of service providers trying to compete against cable and satellite companies.
Second, we need to understand that, although we can all use Media Player on Windows PC’s at no charge, the same isn’t true for manufacturers selling media devices. And the ubiquity of these devices is growing every day, ranging from mp3 players to cell phones.
Finally, we all know that other companies are still trying to offer alternatives in the media delivery market. Indeed, companies such as Apple have transformed themselves to enter the frey.
In this environment, bullet-proof patent claims on the underlying technology are crucial. And it seems that Microsoft is in a precarious position here.
Worse, the discovery process has revealed that vital emails regarding this issue may have been deleted at the direction of a top executive. In Microsoft’s defense, I must tell you their lawyers did offer an explanation: the need to save computer memory … well, you can imagine the judge was not happy!
Given all the drama and the huge stakes, a growing number of investors have taken positions in this highly unusual stock. There is even a web site (BurstInvestors.com) where informative links and downloads are available. Make sure you visit the Yahoo Message Board for discussions of the latest developments.
The eventual outcome of this legal battle is hard to predict.
Microsoft Chairman Bill Gates was deposed in August.
US Federal Judge Motz is supervising the last stages of discovery before sending the case back to San Francisco for trial. Robert Cringely has argued in several PBS.org articles that Microsoft has compelling business reasons to secure these patents before a competitor does, which might lead to an acquisition of Burst.com by Microsoft.
Of course, there’s also the potentially embarrassing issue of the missing emails on Microsoft’s servers. Anti-competitive maneuvers have also been documented to show that Burst.com was prevented from marketing their technology on the Windows platform. Given that Microsoft still faces substantial legal hurdles in Europe, the sensible thing to do might be to reach a settlement.
Given all this, is there any reason to think we may still enjoy the excitement of a jury trial?
All programmers know that theft of source code is a cardinal sin, the one thing that will never be forgotten or forgiven. And that is precisely what Microsoft is accused of in this case.
Although Bill Gates has recently settled several lawsuits that dealt with anti-trust allegations (essentially issues of legally anti-competitive practices), he may be more reluctant to admit some Microsoft employees may have raided a small company’s investment in source code.
