Sony, Philips Get a Leg Up on DRM

Paving the way for beefed up anti-piracy efforts at Movielink, the European Commission has approved the sale of digital rights management (DRM) company InterTrust Technologies to a group that includes Sony’s American unit and Royal Philips Electronics of the Netherlands.

The approval of the $453 million acquisition was important for Sony, which is in the midst of developing the Movielink online paid subscription service along with its partners.

Santa Clara, Calif.-based InterTrust is engaged in a patent fight with Redmond, Wash.-based Microsoft over DRM technology.

InterTrust holds 26 U.S. patents and has approximately 85 patent applications pending worldwide. The company’s patent portfolio covers software and hardware technologies that can be implemented in products that use DRM, including digital media platforms, Web services and enterprise infrastructure.

Industry watchers also see the acquisition as part of Sony’s strategy to turn its PlayStation consoles into a fully-networked device capable of distributing digital content.

In a statement, the EU head office said the deal raised “no serious competition concerns” because the market for such software is in its infancy and already a number of a strong competitors are present, according to a Reuters report.

The actual purchase of InterTrust is being made by Fidelio Acquisition Co., owned by Sony, Philips and other unnamed investors. InterTrust has accused Microsoft of violating its patents, and company officials have discussed damage figures in the billions of dollars.

Sony and Philips have made it clear they plan to use the InterTrust technology to secure digital media distribution over the Internet — from online music to pay-per-view streams of full-length movies.

Covering all its bets, Movielink already has DRM deals with Microsoft and RealNetworks . Movielink is the VoD venture whose movie studio backers include AOL Time Warner’s Warner Bros; Vivendi’s Universal pictures division, Sony Pictures Digital Entertainment, Viacom’s Paramount Pictures and Metro-Goldwyn-Mayer.