Burst Litigation Q&A - June 2002


Q – What exactly are you accusing Microsoft of?

A – We believe Microsoft misappropriated key elements of our technology and presented it as their own Corona product. We spent more than 2 years meeting with Microsoft, after they signed our non-disclosure, teaching them the benefits of our technology in order to sell them a license to use our innovative technology. Microsoft subsequently released Corona as its own revolutionary “third generation” streaming solution, designed to enable theatre quality video and audio delivery on-demand.

Our complaint consists of 2 primary components: (1) Misappropriating our superior technology (and trade secrets) and infringing our patent portfolio, while publicly claiming the technology as their own (2) Anti-competitively excluding Burst.com from the market for streaming media delivery. There are numerous other related issues.

Q- Why did you wait this long to take this action?

A – When Microsoft unveiled Corona in December 2001, we were surprised and dismayed to learn that they had simply taken our technology and incorporated it directly into their media platform. Once we became aware that our technology had been misappropriated, we immediately undertook steps to protect our Intellectual Property rights. That included consulting our patent attorneys.

Q - Isn't this just another case of "Anti-Microsoft" litigation?

A - The misappropriation of Burst technology is parallel to the Stac case (Stac vs. Microsoft). Both were examples of innovative technologies misappropriated by Microsoft without compensation to their creators. Since the Stac case was adjudicated, Microsoft has been found to be an abusive monopoly.

Q- Why would Microsoft need Burst’s technology? Couldn’t they develop their own?

A – We don't know why Microsoft chose to take our innovations instead of developing their own or licensing ours. The fact is that Burst holds an international portfolio of patents on the superior media delivery technology that we have developed. Microsoft chose to simply take the technology without paying for it.
 
Q- Why are you taking this action?

A – This lawsuit is about one thing only – Burst’s right to be fairly compensated for our innovative and superior technology. We spent over a decade inventing, patenting, refining, and introducing this technology to the industry.

If it were not for Microsoft’s illegal actions, we believe our licensing revenues would be significantly higher. Given our ownership of technology we believe to be essential to the successful deployment of high-quality video and audio on-demand over IP networks, we also believe the patents to be very valuable.

Q- The U.S. Government could not win against Microsoft, how do you, a tiny company, expect to prevail?

A – Actually, the Government did win against Microsoft. The company was declared a monopoly by a Federal District Court, and an Appeals Court upheld that part of the ruling. Both Courts also found that Microsoft abused that monopoly position to the detriment of competition and consumers. 

Q- How did Microsoft's pressure on Intel affect innovation in electronic media delivery.

A- This case provides a prime example of Microsoft abusing its monopoly to pressure Intel's research and development efforts away from streaming media software. As a result, Microsoft did cause great harm to specific competitors like Burst and to consumers. Microsoft's tactics delayed an innovative product, Burstware, from reaching the market.

Q- These lawsuits can take many years to resolve, how will you stay in business that long?

A - We have been in business more than 12 years, since 1990. We anticipate being able to see this action through to its conclusion.

Q- How is Corona like Burstware?

A – We believe that Microsoft has incorporated all of the major media delivery innovations that are contained in Burstware, in violation of our patents, non-disclosure agreement, and our trade secrets.

Q- Is anyone currently using Burstware?

A – Burstware is currently being used by several companies that provide video-on-demand services, in the United States and other countries abroad.

Q- Aren’t your problems due to your inability to compete in the marketplace rather than to Microsoft?

A – Burstware was well received in the marketplace; our software won rave reviews. It had -- and still has -- great potential to provide a viable alternative to the Windows Media Platform. It is still being used and distributed by satisfied customers. 

Q- Tell us about your patents. Is Microsoft violating your patents?

A – We currently have a total of 34 issued patents, plus another 7 pending. Our portfolio includes 9 patents issued in the United States and 25 issued in other countries including the European Community, Japan, Korea, Australia, Singapore and India.  We are convinced that that Microsoft is infringing our patents. 
 
Q- What was your relationship with Microsoft before they introduced Corona?

A – We spent more than 2 years meeting with Microsoft. They signed a Non-Disclosure Agreement and engaged in extensive engineering and strategic discussions with us, during which they learned our most valuable proprietary trade secrets. We expected them to operate in good faith, which they did not.

Q- Didn’t Burst “Burst-enable” the Windows Media Player, back in 1999? 

A – Yes. Our “Burst-enabled” WMP premiered in November 1999. 

Q- Wasn’t Burst a Microsoft “Partner”?

A – At Microsoft’s invitation, we became a Microsoft “Partner” and demonstrated our technology as the “Burst-enabled” Windows Media Player in our booth at the Microsoft “Partner Pavilion” at the NAB trade show in April 2000. Our booth was the most crowded exhibit in the Partners Pavilion. Also, in 2000, Burst.com was listed on the Microsoft web site as a “Partner.”
  
Q – What is Burst.com’s CEO’s background?

A - Richard Lang is the Co-founder, Chairman & CEO of Burst.com, Inc. He is also the co-founder of Go-Video, Inc. Lang was the co-inventor of the patented dual-deck videocassette recorder, which is currently sold worldwide. Lang left Go-Video in 1987 to work on electronic media delivery for networked computers, and eventually co-founded Burst with partner Lisa Walters, and with subsequent partner Peter Spiess.

© 2002 Burst.com, Inc.