Burst.com is a company that developed some streaming video technology in the 1990s but couldn't find enough people who were interested in buying it. After trying and failing to turn a profit as a legitimate software company, they discovered the joys of patent lawsuits.
They wrested $60 million out of Microsoft and then turned their legal guns on Apple.
Now Apple, too, has buckled, agreeing to pay Burst $10 million for a license to its patents.
The thing that the media coverage of the patent seems not to convey is how spectacularly unoriginal Burst's patent claims are. As this great post
explained way back in 2002, Burst's secret sauce is that there is
no secret sauce. Burst's patent describes "faster than real time" streaming. There's simply nothing novel or innovative about this; it's perfectly obvious that if you've got a fat enough pipe, you can download video faster than you play it, buffering the difference. Buffering isn't a new "technology," it's a common-sense programming technique that has been used for decades. In a sensible patent system, Burst would have been laughed out of the patent office for claiming they invented such an obvious concept. But in the upside-down world of the USPTO, filing patents on incredibly obvious concepts can net you tens of millions of dollars.
It's not hard to understand why Apple would settle this despite the obviousness of Burst's patents. Research in Motion learned the hard way last year that it doesn't pay to challenge bad patents in court. Even the patent office itself admitted the patents were invalid, but RIM was still forced to pay a $612 million settlement. Comparatively speaking, Apple's $10 million settlement looks like a bargain. But it's important to remember that $10 million is still a huge amount of money for a handful of patents. And every time a bogus patent nets a company a multi-million dollar payout, it's going to prompt other companies to file hundreds more dubious patents, in the hopes of either reaping a windfall themselves or warding off the attacks of a future patent troll. And that, in turn, pushes up the salaries of patent lawyers, diverting thousands of bright and competent people away from more productive profession into a life of filing for and litigating bogus patents.