Cringely: Why did Burst.com let Apple off the hook for only $10 million?

“Sometimes there is as much news in the timing of an announcement as there is in the announcement, itself. That is probably the case with this week’s legal settlement between Burst.com and Apple, which was announced late Wednesday night on the eve of the Thanksgiving holiday,” Robert X. Cringely writes for PBS.

“I think the timing was intended to bury the story, which will be five days old by the time the major news organizations are back to work,” Cringely writes.

“Then there is the peculiar detail of the settlement that Apple’s license specifically excludes one issued and three pending Burst patents on digital video recorder (DVR) technology, yet Burst promises not to sue Apple for infringing these patents for which it is specifically NOT giving Cupertino a license,” Cringely writes. “How odd is that? Isn’t saying you won’t sue someone for infringing the same as giving a license?”

“The elephant in the room here is TiVo. If Burst plans to vigorously pursue licensing these DVR patents and the company continues to follow its tendency to sue the strongest party in each market segment, then TiVo is next and the Apple settlement was adjusted a bit to make that potential litigation easier,” Cringely writes.

“The settlement and Burst’s announcement are so odd that I am sure something — perhaps a great deal — has been deliberately left unsaid,” Cringely writes.

Full article here.

[Thanks to MacDailyNews Reader “Linux Guy And Mac Prodigal Son” for the heads up.]

11 Comments

  1. Apple actually had about 1/3 of the patents Burst was coming at them with invalidated, and apparently was working on the other 2/3.

    This may have been a case where Burst.com decided to go for a lowball settlement t0 prevent the remaining patents from being invalidated as well.

  2. Cringely is a huge Burst.com supporter and in the past, he pooh-poohed Apple for not licensing Burst.com patents. He wrote articles about Apple’s mistakes in suing Burst.com, how they’d lose big. Now he is trying to explain why Apple got of easy. I’d take anything he said about Burst.com with a cup of salt.

    What Cringely might miss is the fact that Apple did get the judge to invalidate 14 Burst’s patent claims out of 36 they used to sue Apple. Surely Burst.com felt the pressure of losing more patent claims. They are parts of the patent portfolio they use to sue companies engaged in media delivery. The potential loss of the rest of the claims should be enough to scare Burst. To sue TiVo, Burst needs these patents. The proof of this pressure is the fact that Burst promise not to sue Apple in the future for potential infringement of DVR patents not licensed to Apple. By settling for $10M, Burst gets enough money to pay the $5.4M lawyers’ bill and enough money as token “win” and they get to keep the rest of their patent claims unchallenged.

    For Apple, they can make a lawsuit go away for $10M and avoid a lengthy court battle. They also get a promise of no lawsuits from Burst in DVR technology, and they let Burst keep enough patent claims to harass their competitors. Pretty smart, I think.

  3. Cringely is a huge Burst.com supporter

    Microsoft got taken for $60 million, Apple for $10 million.

    It seems proportional to future market share. ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

  4. Burst lost big time. Apple saved a lot in legal fees. Apple got access to Burst’s patents. Burst got no reciprocal patent agreement.

    Burst got some chump change to roll over and play dead.

    Which stock would you like in your stock portfolio?

  5. What everyone says about Cringely and the Burst case is true. However, Cringely says the same thing, if you’d just read his article. His point is that he thinks there is something more to this deal, like Apple possibly buying Burst. It’s not a negative article at all. I think his opinion is right, Apple was lucky to have gotten away with a modest settlement, because it risked far more.

  6. “Why did Burst.com let Apple off the hook for only $10 million?”

    Here’s a better question.

    Why did Burst.com let MS off the hook for a only $60 Million?

    Burst’s technology would be great…if we were still using dialup.

  7. KenC: His point is that he thinks there is something more to this deal, like Apple possibly buying Burst. It’s not a negative article at all. I think his opinion is right, Apple was lucky to have gotten away with a modest settlement, because it risked far more.

    Why would Apple buy Burst.com? They are already in the clear from lawsuits and future lawsuits in DVR technology. They are free to use Burst.com’s patents as a part of the settlement. What else does Apple need from Burst? And if Apple had planned to buy Burst, they would have been stupid to get 14 patent claims that could be theirs invalidated, wouldn’t they?

    In fact, Apple not buying Burst is the best decision because Burst are free to sue everyone and his dog without Apple’s name getting dragged into the mud that is patent trolls.

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