CastleCops® - Symantec takes the hit

Symantec takes the hit
Tuesday 26th August 2003

When Symantec announced that it had done the decent thing, albeit six years late, and purchased a key virus scanning technology patent from Hilgraeve, last week it put an end to any speculation that the Company might be leaving itself open to a massive charge.

As it was, the settlement of $62.5 million was just a drop in Symantec's billion-dollar plus turnover. Following the settlement, Symantec announced forward-looking guidance for second quarter revenues unchanged in the range of $375 to $395 million. Total revenue for fiscal year 2004 is expected to be approximately $1.665 billion.

That it took so long after Network Associates, facing a similar lawsuit from Hilgraeve, settled in 2000, one can only speculate as to whether Symantec or Hilgraeve got the better of the deal. In addition to the specific patent that was subject to the lawsuit, Symantec have bought licences for the other patents that Hilgraeve hold.

It seems a sensible approach, as any doubt in the ownership of Symantec's intellectual property (or for that matter, that of any other software house) can severely hinder commercial activities, both in terms of winning new business and retaining existing customers.

Now that everything is clear in the Symantec house, at least as far as the Hilgreave patent issue goes, there is one thing that is unclear. Who are Hilgraeve? And why are they important?

A bit of research reveals that they are quite an interesting company. For a start, they are the makers of HyperTerminal that ships with Windows. They also have twenty years experience in doing data communications in the terminal space.

Hilgraeve have developed two simple, yet seemingly very usable secure communication products.

DropChute is an instant file delivery software package that allows users to transfer files of any type or size across the Internet or modem-to-modem connection. Each DropChute product establishes a point-to-point connection between two computers and allows users to transfer files or chat using keyboards and headsets. The Company claims that this is more reliable than email attachments, and easier than FTP.

DropChute Pro and DropChute Enterprise 3.02 feature support for digital certificates for authenticating connections, and encrypting files. DropChute Enterprise also features a number of enhancements for corporate installations including the ability to run as an NT Service and scheduled deliveries.

HyperSend is a secure document delivery service that establishes a secure data channel between sender and recipient. Documents are sent directly to recipients through this secure data channel. Deliveries never rest on mail servers and are fully encrypted to protect privacy.

The product is in use in several healthcare applications. In one case, enabling clinical laboratories to exchange lab information securely with physicians, hospitals and other healthcare entities, using just a Web browser.

HyperSend is also finding a home in corporate land. Hilgraeve have recently announced that companies including Principal Financial Group and Motorola. These companies apparently switching to HyperSend when UPS Document Exchange Private Express ceased operations.

Hilgraeve is one of those software houses that seems to prove that there is a role for niche ISVs, and if they are smart enough to protect themselves with patents in emerging technology, they can do well for themselves.

It will be good to see Symantec's Gateway product incorporate some of HyperSend and DropChute capability.

John McIntosh

ITA


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