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Video software

Living in an Immaterial World

3:50 PM -- Cooler heads prevailed in the patent battle between Verimatrix Inc. and Widevine Technologies Inc. , with Widevine agreeing to license some of its technology and end the shedding of any more blood between the two video security firms. (See Verimatrix, Widevine Settle Suit.)

The whole dust-up, you might recall, centered on two Widevine patents (No. 7,165,175 and No. 7,376,831, which is a continuation of the '175 patent) that describe an "Apparatus, System and Method for Selectively Encrypting Different Portions of Data Sent Over a Network." (See Widevine Sues Verimatrix.)

Widevine filed the suit in August 2007, alleging that Verimatrix's VCAS products infringed the patents. The suit was set to go to trial in about four weeks, but the companies instead settled, with Verimatrix making no admission as to infringements of the Widevine patents.

As these out-of-court settlements typically go, neither company is saying how much cash will be changing hands. But it certainly won't be a king's ransom.

The licensing terms were "not material to our business at all," Verimatrix CEO Tom Munro told Light Reading Cable. "We're delighted with the outcome. We can spend money on engineers instead of lawyers."

Likewise, he says the pending litigation didn't have much of an overhang on Verimatrix's business of supplying software-based conditional access and digital rights management systems. "It hasn't kept us from meeting our goals," he said.

At last check, Verimatrix has 300 operator customers serving a combined 12 million subs. About 85 percent of its business comes from outside the US, with Europe as its most profitable region. Telia Company and Belgacom SA (Euronext: BELG) are two of Verimatrix's largest customers.

Widevine said it tried to offer Verimatrix a license for the patents before filing the lawsuit, so it pretty much got what it wanted all along. "We feel we've accomplished what we set out to do, which is to protect our intellectual property," a Widevine spokeswoman said.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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