InterTrust Technologies, a pioneer in the development of digital rights management systems, has agreed to be acquired by Fidelio Acquisition Corp., a company whose two major partners are Sony and Philips Electronics. The purchase price is $453 million.

The acquisition will give Sony and Philips access to InterTrust's portfolio of 26 patents plus about 85 pending patents that cover the digital delivery of information. Last year, InterTrust sued Microsoft, charging the software giant with violating 11 of its patents. The lawsuit is still before the courts, and Fidelio is expected to continue to pursue the complaint.

Despite the development of a rich cache of DRM services, InterTrust has been plagued by financial problems, and a work force that was once more than 400 strong has been reduced to 38 employees. In May, the company announced that since the market for stand-alone DRM products had developed much slower than expected, it was changing its business model to focus on licensing its patents (News, May 20). It also said it had started looking for a strategic partner.

The company was able to slow its burn rate this year, but still lost $23.1 million on revenue of $9.7 million in the nine months ended September 30, 2002. In 2001, the company had a net loss of $115 million and revenue of $8.4 million.