Intertainer was the leader of the idea of entertainment on demand over Internet platforms before Google was even thought up”, says Jonathan T. Taplin, a Hollywood executive who co-founded Intertainer back in 1996, as quoted by the New York Times in its January 3, 2007 article entitled, “Patent Lawsuit Names Leading Technology Firms“. Taplin remembers being “laughed out of the room” in 1997 at a cable industry convention for asserting that in the future all movies would be distributed over the Internet. Ten years later Intertainer is looking for vindication in a patent infringement lawsuit filed in late December, 2006, against subsequent digital download leaders, Apple, Google and, um, Napster.

Like many technology start-ups that first appeared during the dot-com bubble of the late 1990s, Intertainer obtained spectacular financings from investors, made gossamer-like strategic alliances, and beat a path to the patent office with patent applications in hand. In 2001, Intertainer filed a patent application that was issued as a patent in 2005 – for a “digital entertainment service platform”. The abstract reads as follows:

The present invention is directed to an open business platform that provides an end-to-end solution for managing, distributing, and/or retailing digital media assets from various content suppliers. In one or more embodiments, the present invention provides an integrated system that permits media content suppliers to deposit their media assets with the system where they are prepared by a content management system for distribution to consumers via a secure distribution system. The media content suppliers may then track and control the use of their media assets through a subscriber management system for managing consumer accounts, a licensing server for issuing licenses restricting the use of media content, and a royalty reporter for determining and reporting royalties to the various content suppliers.

Reading the claims in detail, however, provides no revelations or inventiveness, so far as I can see. What is revealed, in albeit a well-crafted and complex manner, is a system that duplicates the prior art.

Intertainer could be viewed as a Patent Troll because it is no longer in the business of digital downloads or any business, for that matter and its only reason for existence seems to be to make abusive patent infringement claims. But Intertainer no doubt would say that, but for the infringements of its rights it would be thriving today and should not be viewed as a mere Patent Troll.

Intertainer’s lawsuit has been filed in the U.S. District Court in Marshall, Texas – no surprise there because that venue is well known for being very generous to plaintiffs in patent infringement actions. More information on the fast track patent justice dispensed in Marshall, Texas appears here.

What I find more intriguing, however, is Intertainer’s choice of defendants. Intertainer could have sued any number of companies now employing a digital download platform. For example, as a small, defunct or impecunious litigant, it could have used the tactic of moving up the litigation food chain from the bottom – the alleged tactic of Acacia Research Corporation, which has a portfolio of controversial patents (including a patent on audio and video streaming), i.e. by first going after low-hanging fruit (smaller, independent players who would have no choice but to sign a license because they could not afford to litigate, on-line porn sites, defendants who might easily succumb to default proceedings which nonetheless might be useable as “precedents” against larger prey, etc.), then move up to larger catches. However, right out of the gate, Intertainer chose to sue, principally, expensively, and head-on, Google and Apple – i.e. traditional, heavy-hitting adversaries of you-know-who, Microsoft.

So, Intertainer is suing the adversaries of Microsoft. What’s that got to do with anything? Lots, apparently. Microsoft was an early investor in Intertainer. Intertainer developed entertainment on-demand applications and services for Microsoft’s original Internet TV platform. Microsoft and Intertainer were in a strategic alliance at least as early as 1999, to deploy on-demand entertainment systems over the Internet. For example, a Microsoft press release from January 24, 2000 states:

Intertainer Inc. and Microsoft Corp. today announced a strategic alliance to deliver a collection of A-list entertainment on demand to consumers via Intertainer’s broadband service. This alliance underscores Microsoft’s role as a key enabler of enhanced TV services and further expands the cooperative relationship formed when Intertainer announced support of the Microsoft TV platform in June 1999.

As reported by the New York Times, Intertainer says that Microsoft (and Intel) were not involved in the decision to sue Apple and Google. Intertainer says the decision was made by its board of directors and that none of the original corporate backers have board seats. However, Intertainer has been out of business since the early part of this decade. It seems logical that if a company is out of business, then likely, money problems were the cause – or the result. Either way, backers or investors would not have been paid in full. Even if Microsoft or Intel were not presently on the board, they would still have remedies and influence, especially if they were secured creditors. Intertainer concedes that several of the original investors have taken patent licenses – names and terms undisclosed. It seems logical to me, that at least in the case of Microsoft, it likely has a royalty-free patent license from Intertainer, either as part of its original relationship with Intertainer or as part of a subsequent work-out.

The upshot, from what I can see, is that Microsoft has positioned itself exquisitely. It can sit back and watch the battle unfold, as its proxy – Intertainer – launches an expensive and distracting patent infringement attack on Apple and Google over dominance in the realm of digital download platforms. Stay tuned to a server near you for more developments.