Digital rights arena in focus with new investments

7 Apr 2004

Media titan Time Warner has made a strategic investment in ContentGuard, a US-based developer of digital rights management technology, alongside existing investor Microsoft, which has increased its own stake in the company.

The companies said that they would collaborate with US-based ContentGuard to develop its intellectual property and aid further development in the areas of digital content distribution and rights management.

Among ContentGuard’s patents is a system for controlling the distribution and use of digital works, including a fee reporting mechanism. The term digital content includes movies, music, books and software.

Digital rights management is growing in importance as it allows organisations to provide their content to users in a secure way that prevents unauthorised downloading, copying or illegal use.

“This is a significant milestone, not only for ContentGuard but for the digital content distribution market in general,” said ContentGuard CEO Michael Miron. “Together with Microsoft’s, Time Warner’s input into our company’s direction will accelerate the pace of development for the new standards and technologies that we champion. This is vital to the market’s ability to act on the potential of digital content and give more choice and value to customers.”

ContentGuard wants to create a single worldwide standard Digital Rights Language based on its XrML (extensible rights markup language) technology. The company believes that such a standard will enable interoperability across DRM systems for digital content or services.

Privately held, ContentGuard is a spinoff from Xerox and the technology it provides was originally developed in the noted Palo Alto Research Centre (PARC), where many current PC, printer and networking technologies were first invented.

The company licenses its software to other companies and lists Sony as one of its main customers.

Following the latest investments, which involved Time Warner, Microsoft and ContentGuard buying substantially all of the ownership held by its former parent, Xerox will retain a small equity stake in the DRM company.

By Gordon Smith