Xerox, Microsoft Tackle Content Protection

Xerox Corp. and Microsoft Corp. allied Thursday to tackle one of e-commerce’s most vexing challenges: Content protection.

The two companies joined to launch ContentGuard Inc., a new Internet company that will utilize a technology developed at the Xerox Palo Alto Research Center (PARC) to deliver comprehensive software solutions to protect and manage books, documents, music, software and other valuable content distributed over the Web.

PARC scientists already have bragging rights for the development of the graphic user interface, ethernet, the mouse and other technologies that revolutionized the computer industry.

The companies said the ContentGuard technology is the foundation for various products and services to deliver secure, user-friendy solutions for protecting and distributing digital content over the Internet. Tagged digital rights management (DRM), these solutions are designed to allow content developers and publishers to establish and retain control over how materials are used, copied and purchased. The products and services also give publishers or authors the ability to deploy materials over the Internet in new ways; for example, creating free time-restricted previews, single-chapter previews or one-time use scenarios.

The ContentGuard portfolio currently includes the ContentGuard Internet content protection software suite and the electronic Publishing Clearing Service (ePCS) offered jointly with Reciprocal Inc. ContentGuard can protect and manage digital content such as market research, business reports, patent applications, books, sheet music and academic course packs. Plans are under way to enable DRM solutions for audio and video material.

ContentGuard Inc., formerly the Xerox Rights Management group, is a Xerox (XRX) spin-off. Xerox will maintain a majority stake in the company. Microsoft (MSFT) is a minority investor. Other minority investors are expected to be announced in the future.

Microsoft plans to use ContentGuard’s technology as its rights management solution for Microsoft Reader eBook software and other initiatives. The eBook software will debut this summer. Microsoft said ContentGuard technology will also be incorporated in future releases of Windows Media Player and Windows Media Rights Manager.

Michael Miron, co-chairman and chief executive officer of ContentGuard, said that the company, as an independent entity drawing on the resources of Xerox and Microsoft, will be better able to compete as “an Internet company on Internet time.” He added that ContentGuard will also be able to raise capital and form partnerships as required.

ContentGuard Inc. and the two companies will also collaborate on development of future DRM technology and standards, including the establishment of XrML (eXtensible rights Markup Language) as a standard for all forms of digital information and entertainment. XrML will be licensed royalty-free to the industry to enable interoperability across rights management systems.

In addition to Miron, ContentGuard is led by Ranjit Singh, president and chief operating officer and Dick Brass, co-chairman of ContentGuard and Microsoft’s vice president of technology development.

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