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Technology Stocks : Identix (IDNX)

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To: Hal who wrote (17841)5/8/2000 3:02:00 PM
From: David  Read Replies (1) of 26039
 
We could be seeing a lawsuit brewing between BioAPI and I/O Software. From the BioAPI statement's text (note my italics):

". . . it is disappointing that Microsoft has chosen not to utilize the recently released industry consensus biometric
API standard, the BioAPI, as the basis for its integration of biometrics into its Windows(R) Operating System. The BioAPI specification is available in the public domain and is royalty-free to all interested parties. It is an 'open systems' specification, intended for use across a broad spectrum of computing environments to ensure cross-platform support. This includes the Windows operating system as well as other environments such as UNIX and Linux.

"It is expected that it will be a considerable time, perhaps years, before Microsoft begins shipping an operating system with embedded biometric support. To avoid confusion in the industry during this interim period, the BioAPI Consortium will seek continued discussions with Microsoft to ensure interoperability and uniformity of biometric solutions in the marketplace. In fact, it has been the intent of the BioAPI Consortium to incorporate the BAPI specification from I/O Software into the BioAPI structure as the basis for the BioAPI device level interface layer. I/O Software has made previous commitments to the BioAPI Consortium to make BAPI available to the BioAPI Consortium for this purpose. I/O Software is a current member of the BioAPI Consortium and chairs the Device Working Group."

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My translation: I/O is not only a member, but a key member, of the public domain, royalty-free BioAPI being developed by the whole biometrics industry. I/O is legally required "to make BAPI available to the BioAPI Consortium" for the purpose of constructing the BioAPI "device level interface level." Instead, I/O has sold exclusive use of this technology to Microsoft, breaching its duties to the BioAPI consortium, and exercising an illegitimate proprietary role. There was no mention of the Consortium consulting with I/O on this event, just Microsoft -- that tells me that I/O has absolutely refused to reverse last week's deal, but the Consortium believes it will have better luck on getting cooperation from Microsoft, and the Consortium will be seeing I/O in court. Indeed, Microsoft has much more incentive than I/O to cooperate, for several reasons: (1) It will have other alternatives to this deal, while I/O would be SOL; (2) As a few people may already know, MSFT is already in big trouble for legal misconduct (US government participation in BioAPI doesn't help MSFT here); and (3) Arguably, at least, MSFT was sold a bill of goods by I/O . . . and I/O surely is supposed to have known better.

The release also makes the point, none too subtly, that BioAPI will provide a cross-platform, universal solution, where Windows will not. Inconsistencies between BAPI and BioAPI will impede MSFT's stated interest in the adoption of biometrics, but MSFT's adoption of a BioAPI solution would speed biometric acceptance. This was one indication to me earlier that MSFT had plunged into the I/O deal without much due diligence. This BioAPI response provides further evidence that Microsoft acted without enough staff work.

Let's go the next level: If Microsoft decides that they should make peace with BioAPI, who has equivalent products to I/O's SecureSuite? I see three possibilities: BioLogon, SAFlink, and BioNetrix. If the IDX BioEngine powers all three, Microsoft is going to have no choice but to come to Identix. The discussion then will be over Identix's interest in licensing its technology versus Microsoft's interest in buying it. My guess is that if Microsoft wants to buy the IDX software, it will have to buy Identix -- and that won't be easy, especially if Motorola can be persuaded to take a blocking stake in the company. On the other hand, if ESAF or BioNetrix is not using the IDX BioEngine, you'll see a very tricky multi-party game played out.
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