Microsoft Adopts Digital Rights Management Technology From Xerox Spinoff

Microsoft has taken a stake in ContentGuard, a new Xerox spin-off that specializes in digital rights management (DRM) technology. ContentGuard’s DRM solution protects intellectual property such as books, music, video, and software sold over the Internet. Microsoft will initially use ContentGuard’s technology in Microsoft Reader, software for displaying books on computer screens and Personal Digital Assistants (PDAs), and will expand its use to Windows Media Player, Windows Digital Rights Manager, and other Microsoft products. Microsoft’s dominant position on client desktops, widespread support for ContentGuard’s Extensible Rights Markup Language (XrML) among content vendors, and the easy-to-use, end-to-end solution this deal enables could establish ContentGuard as a de-facto standard for content protection.

The Current State of Copyright Protection

The e-content market, which J. P. Morgan estimates will grow to US$275 billion by 2003, is a double-edged sword for content producers. Although it expands the market for their content, readily available hacker tools like Napster, which allows redistribution of music files, allow people to easily copy and distribute copyrighted material. To combat copyright infringement, leaders in the publishing, recording, and movie industries have been searching for technical solutions that will give them control over use of their products. To date, solutions have been developed by AT&T, IBM, Microsoft, the Recording Industry Association of America (RIAA), and others. However, no particular content protection system has achieved a dominant position. (For more background on e-content distribution and protection, see “The Competitive Landscape for Windows Media Technologies 4.0” on page 14 of the Oct. 1999 Update.)