Is Microsoft’s DRM Patent for P2P Networks Too Late, or Ahead of Its Time?

msftIf Microsoft’s (s MSFT) freshly granted patent for a digital rights management system sounds like a 2003 idea coming to fruition in 2009, that’s because it is — the patent that was granted yesterday was filed six years ago. The newly codified bit of intellectual property is a DRM system that’s distributed over peer-to-peer networks, decentralizing a processing mechanism that traditionally resides on a central server. The entertainment industry has used DRM to prevent unauthorized duplication of copyrighted material, but it’s been largely abandoned by the music business in response to customer demand for unprotected files.
Information Week’s Alexander Wolfe makes a case that content owners could still use DRM in legitimate P2P music-swapping networks at some point in the future, “when peer-to-peer networks reemerge from their current sub-rosa position and become popular, brand, public-facing methods of distributing content,” enabling Microsoft to reap considerable royalties. Indeed, P2P technology has a place in above-board distribution as it partially powers everything from streaming music service Spotify to several video distributors, so Wolfe is onto something. But if the idea is that the old paradigm will be flipped — you can do what you want with the file you pay for, but you can’t duplicate the free file you find on P2P networks, instead of the other way around — I have my doubts that these “public-facing methods of distributing content” will ever dominate if they’re full of DRM.
Wolfe asserts that “the whole ‘Web wants to be free’ versus ‘evil corporations with their DRM’ argument…hasn’t been resolved,” despite evidence that 95 percent of digital music acquired by consumers today is pirated (and presumably virtually all DRM-free). Apple has dropped DRM from its market-leading music store after consumers resisted DRM to the point that the music industry finally gave up. Copy protection is eroding as people flock to unprotected alternatives, and most DRM has turned out to be breakable anyway. It’s hard to imagine where this patent will fit in — unless the past six years have simply obviated it, and Redmond isn’t planning to do anything at all with it anymore.