Nokia has dramatically changed its position on digital rights management technology, opting to take an expensive patent license from Intertrust, the DRM company jointly owned by Sony and Philips, for use in handsets to protect music and video.
The bland four sentence statement said very little except that Nokia had been granted worldwide access to what is the broadest patent portfolio in DRM and trusted computing, but this could potentially be the breakthrough towards a genuine standard for interoperable DRM on handsets, extending to other devices such as PCs and set tops.
Intertrust proved its mettle back in 2004 after a three year legal battle with Microsoft, which was giving away its Windows Media DRM, with elements of technology, which was alleged to be breaching Intertrust patents. The $440 million out of court settlement came at the 11th hour, and only after various Microsoft partners had been encouraged to try to get the Intertrust patents invalidated (but failed). Instead the company has filed more and more patents and now holds key positions in how to manage decryption keys, systems using secure trust webs and also in domain management ‘ the process whereby a household’s devices can swap data freely without interference, and yet the content remains protected from swapping over the broader internet.
Intertrust technology is seen as one of the core elements needed to implement the common DRM system that was defined by the Open Mobile Alliance and completed in 2004, which was supposed to be the universal handset DRM, designed by the industry for the industry. But the clumsy and weighty licensing regime adopted by the MPEG LA patent pool, and driven by licensees Philips, Sony, Intertrust, Panasonic and the Microsoft controlled ContentGuard, priced it off the market. If it had been implemented in its first license offering OMA DRM would have eventually driven something close $1 billion a year of royalties.
That offer was for $1.00 per customer plus $0.25 a year, and then the patent pool offered a second deal at $0.65 per customer, but both deals were widely ignored by most cellular operators and in October last year the patent pool issued another vastly reduced offer.
In the meantime Intertrust effectively pulled out of this and offered its own patents separately, charging rates of around $0.12 per domain leaving operators to decide whether or not they needed the advanced Rights Expression capabilities of the Microsoft controlled ContentGuard or the other Matsushita technology license.
Intertrust has now had some success with deals at Vodafone and LG. Motorola added its name to the list of licensees during February, as has Adobe for use in its own media player.
Spanish cellular operator Telefonica has also been working for 18 months with Intertrust technology, specifically working with its open source DR< code called Marlin and what it calls OMArlin, a version which offers full interoperability between OMA and Marling across the PC and handset. This was developed with the help of Orange and Vodafone, and it can be used with OMA on the handset and Marlin on the PC, or with both sides using Marlin. Telefonica has not yet acquired a license to the Intertrust patents but that's almost inevitable if the work on OMArlin is used in one of its services. But after almost four years with next to no takers for OMA DRM Nokia last year decided instead to adopt the new Microsoft PlayReady for its strategic Ovi portal, which is a new version of Windows Media DRM, which extends it into the key area of managed 'domains,' so that music and video can be easily shared across handsets, PCs and other devices, within say, a home. At the time the company felt that it did not need to license the Intertrust patents and told us so directly several times. Intertrust, on the other hand, made it clear to us in the past that the Microsoft license only extended to its Microsoft platforms, and that offering PlayReady on Symbian devices would not be included in the license. Which is why we think that the Nokia move is a substantial one. The deal gives the Finnish handset maker the flexibility to use the Intertrust patents in PlayReady (Nokia is understood to be helping Microsoft complete the Symbian implementation), as well as allow Nokia to offer OMA compliant devices if any operator decides to resurrect the defunct DRM standard after 4 years in the wilderness. So with many of the major handset makers on board, and with key European operators on board, and with more understood to be ready to sign up, the entire European cellular community is on the verge of offering DRM from a level playing field, all at least based on the same Intertrust patents. Whether these are embedded in multiple products, possibly a straight run off between Marlin, PlayReady and OMA or if the OMA DRM will return after years of inaction is uncertain. Certainly if OMA is now considered cheap enough to license, then a standard that was once driven by both Vodafone and Nokia is likely to find favor once more. 'This license provides Nokia with the design freedom to deliver many advanced features in mobile computing,' said Matti Kauppi, vice president of Intellectual Property Rights, Nokia. 'We have previously worked with Intertrust and are pleased that our thinking regarding the development of DRM technology has once again come closer together.' In fact Nokia once used to be a 5% shareholder in Intertrust back in 2001, before the company was sold to Sony and Philips. It could have signed a patent deal quite cheaply back then, but never chose to do so. 'Nokia is a wireless market leader whose innovative products continue to set and drive major mobile trends,' said Talal Shamoon, chief executive officer of Intertrust. 'We look forward to Nokia incorporating our technology into exciting new mobile devices and services that benefit content providers and consumers.' Meanwhile Intertrust is about to open its first office in China, and will no doubt be pushing its patents as the basis for products in what has become the biggest single cellular market in the world.