Microsoft sharing R&D with startups

Microsoft's new effort to capitalize on its research involves licensing technology ranging from tamperproof identification-card software to computer tricks that make low-end speakers sound top-notch.

Usually known for closely guarding the rights to its technology, Microsoft last month said it was embarking on the program as a bid to help startups by giving them access to some fruits of the company's advanced research group. More details of the effort were announced yesterday at a gathering of venture capitalists in New York.

"If we pull this off, if we're able to collaborate effectively ... we can create new companies and new jobs," said David Harnett, senior director of Microsoft's Intellectual Property Ventures.

Microsoft announced the program when it made its first licensing deal last month, a venture involving Inrix, a Redmond-based startup using Microsoft research to develop traffic predicting software.

Initially the company will license work done by its advanced research group, but eventually it may also license work developed by products groups as well, such as features cut from software programs.

Before joining Microsoft in 2001, Harnett worked on acquisitions and venture-capital investments at Hewlett-Packard. His IP Ventures group includes three people with venture-capital experience and three software developers who will help licensees figure out the technology they acquire from Microsoft.

Harnett said the program was developed after Microsoft consulted with venture capitalists in Seattle, Boston and the San Francisco area to find out what technology and licensing approaches would interest them.

To begin with, Microsoft is opening up access to 20 technologies — mostly ones that haven't yet made it onto the market.

The list includes:

• Conference XP, which uses high-performance audio, video and network technologies for distance conferencing.

• Face detection and recognition software.

• Natural language-processing technology that creates learning programs that adapt to students based on their answers to previous questions.

Michael Gartenberg, an analyst with Jupiter Research, said Microsoft is making a smart move. The company has spent billions of dollars on research and development, and has come up with some great ideas, he said, "probably far too many to ever be incorporated into products. So I think it's a great way for them to share those ideas with the marketplace."

Eventually, Microsoft plans to make more technologies available for licensing.

Agreements will be negotiated case by case, giving Microsoft part ownership in startups that buy rights to the company's technology, royalty payments, or both, said David Kaefer, director of business development for Microsoft's intellectual-property and licensing group.

Kaefer said the company will model partnerships after the deal with Inrix, which was founded by former Microsoft and Expedia employees.

Material from Seattle Times technology reporter Brier Dudley and The Associated Press is included in this story.