The failed electronics-chain store closed its doors and began liquidating assets two years ago, and still there is some intellectual property left to sell.Turns out that in the decade before getting demolished by Best Buy, the 2008 financial meltdown, and its own hapless management, Circuit City had sought to boost pioneer digital-video distribution.The company pumped a boatload of money into developing technology that it hoped would help it cash in when the market finally emerged Some of Circuit City's patents, including those from the company's ill-fated start-up, Digital Video Express, cover data encryption, content-protection, and watermarking technologies.They were specifically designed to help a service provider restrict access and prevent the pirating of streaming media.What's interesting about all this is that some of Circuit City's technology actually deals with issues now affecting Internet distribution, such as authenticating users, billing, and conditional access.Authentication--ensuring that the viewers of a TV show or film are the people entitled to watch--is reportedly one of the issues that has held up a wider roll out of TV Everywhere, the IPTV verification system from Comcast and Time Warner.Overseeing the patent sale on behalf of the Circuit City Liquidation Trust is Streambank, an intellectual-property investment bank.
"These technologies were developed to support business models that are only now starting to emerge," Fried said."As all media content, books, videos, and music change their distribution models, the value of these patents will become increasingly valuable." Some of the technology grew out of the Digital Video Express effort, or Di VX--not to be confused with Div X compression technologies.Di VX was Circuit City's attempt to compete with the traditional DVD.Di VX was a limited-use disc that allowed viewers access to movies for 48 hours after the initial viewing period.
After that, a customer had to pay continuation fees for extended access.
To unlock the disc for continued play, Di VX owners had to buy a Di VX player and attach it to a phone line, which would then unlock the disc after the customer paid. The company sank $100 million into the project, which was launched in June 1998 and was shut down in June 1999.