TechFlash: Seattle's Technology News

MOD Systems co-founder Mark Phillips was indicted today on multiple counts of fraud for allegedly embezzling money from the Seattle company, and then using the funds to purchase Breguet watches and to make a personal investment in a Redmond startup. Today's indictment, filed in U.S. District Court in Seattle, included three counts of wire fraud, one count of mail fraud and one count of attempted bank fraud. Phillips remains incarcerated at the Sea-Tac federal detention center following multiple bond violations, the most recent of which was an illegal inhalation charge in which the high-tech executive allegedly huffed dust cleaning spray in what his attorney called a "cry for help."

Starbucks is adding a new flavor to its mobile payments strategy: BlackBerry. The Seattle-based coffee chain is launching a free BlackBerry app that lets people use the devices to buy coffee in stores via barcode scan. Starbucks introduced the same kind of app for iPhone and iPod touch a year ago.

The BlackBerry app lets people check their Starbucks Card balance, add money to their account with a credit card, and make purchases at Starbucks. At checkout, the app generates a barcode on the BlackBerry screen, which is then swiped over a scanner.

Right now the mobile payment feature only works at a limited number of locations: 16 Starbucks stores in Seattle and Silicon Valley, and about 1,000 Starbucks inside Target stores. But Starbucks "is looking to expand the test," said Chuck Davidson, category manager, innovation for the Starbucks Card unit.

Fans of Paul "Bear" Vasquez and his legendary reaction to seeing two rainbows across Yosemite National Park may find it a little tough to watch this promotional reenactment of the famous Internet video for Microsoft's Windows Live Photo Gallery software. Then again, it is pretty clever as a marketing trick.

Bellevue-based Likewise Software and Sunnyvale, California-based Centrify have been named in a patent infringement suit brought by Aliso Viejo, California-based Quest Software. The suit alleges that both Likewise and Centrify violated a patent issued in 2009 to Matthew Peterson and Daniel Peterson related to how Unix and Linux systems could be managed using Microsoft Windows policy management tools. The patent -- titled “Apparatus, System, and Method for Managing Policies on a Computer Having a Foreign Operating System” -- was initially developed at a Utah company known as Vintela which was later sold to Quest for $56.5 million.

Likewise, an open source software company backed by Ignition Partners, Intel Capital and Trinity Ventures, said it planned to defend itself against the suit. "After a detailed review of the information available we believe that the charges are without merit and that the company is in a strong position to defend itself," the company said in a statement. "Unfortunately we cannot comment on additional details of the case at this time. Patent disputes have become a regular course of business in the software industry, especially for successful companies."

Paul Allen (PSBJ/Dan Schlatter)

We've known for a while that Microsoft co-founder Paul Allen was writing a memoir, based on a report last year by Crain's New York Business that Penguin Group's business publishing unit had acquired the rights. The book, due out next year, promises to generate even more attention now that Allen is taking on Google, Apple, Facebook and other tech giants in a high-profile patent lawsuit.

But even more interesting, in light of the controversy surrounding the suit, is what we've learned is the working title for the book: "Idea Man."

Microsoft has released Windows Phone 7 to manufacturing, which is tech lingo for "OK, we're done," to the extent that any technology project can be done nowadays in this era of regular software updates.

The announcement today on the official Windows Phone Blog is a key milestone for the Redmond company in its bid to come from behind in the mobile market, where it has fallen from a leadership position to also-ran status in the face of competition from Apple and Google.

From here the software goes to the company's partners, who will work to get Windows Phone 7 onto devices in time for the holiday season. Microsoft isn't saying precisely when the first Windows Phone devices will come out, but it's assumed to be October.

A user profile in iTunes' Ping social network.

Digital music guru and technology analyst Matt Rosoff watched Apple's announcement of its new Ping social network for iTunes today and was reminded of Microsoft's Zune Social music service. I read Rosoff's CNet blog post about Zune's new predicament and was reminded of Classmates.com.

That's because one key in any social network is numbers.

Facebook has been able to leverage that fact, building its user base to overshadow Classmates and older rivals in general-purpose social networking. And Apple likewise has a critical mass of users in its newly launched competition with existing social music services -- enjoying an installed base of 160 million iTunes users around the world, according to Steve Jobs' presentation today.

Blink Interactive, a Seattle-based Web design and usability testing company, has acquired Blue Flavor for an undisclosed price. As a result of the deal, Blue Flavor founder Nick Finck will join Blink Interactive as User Experience Director.

Marketfish just landed an additional $1.5 million in venture financing, money that that fast-growing Seattle online marketing startup will use to grow sales, build out the platform and establish a new office in New York. The round -- led by Rustic Canyon and Accelerator Ventures -- comes about 10 months after the company closed a $2 million angel round.

Chief Executive Dave Scott said that business is booming with more than 320 marketing and advertising agencies utilizing the product to generate new business leads. To date, Marketfish has compiled more than 500 million records -- typically marketing lists from organizations such as The American Society of Cinematographers, BusinessWatch, Tennis magazine and others. Marketers typically pay on average from $20,000 to $30,000 to rent one of the lists.

Image via gdgt's live blog, which you can follow here.

Let the mobile video-game wars begin. No, not Nintendo vs. Sony, but Apple vs. Microsoft.

Apple CEO Steve Jobs this morning announced the iOS Game Center, a new video-game app and software platform that will help developers of games for the iPhone and iPod touch introduce features including centralized achievements, leaderboards and, most notably, real-time multiplayer gaming between devices.

Almost hidden in a market-expansion announcement by T-Mobile USA yesterday was a rather bold statement about the Bellevue-based wireless company's plans to increase the speed of its High Speed Packet Access Plus (HSPA+) network next year -- a move that could boost the company's prospects as it competes against 4G services from Clearwire, Sprint, and Verizon's upcoming Long-Term Evolution (LTE) rollout.

“Our new network offers today’s available 4G speeds to more people than any other wireless network in the country and we’re not done yet. We are now on pace to more than double our HSPA+ footprint reaching more than 200 million people by this year with plans to offer 42Mbps theoretical speeds in 2011," said Neville Ray, chief network officer for T-Mobile USA.

Microsoft is bringing back the Windows 7 Family Pack, allowing people to upgrade as many as three existing Windows XP or Vista machines to the new operating system for a total of $149.99, hundreds of dollars less than the price of buying individual upgrades.

The company made the announcement this morning, saying that the Family Pack will be available starting Oct. 3 in the U.S., and later in the month in selected international markets.

This is one of the most over-hyped Microsoft products in years, so the most important thing to explain up front is that it's not a phone, or a time machine, or any of the other things that people might have speculated after the company's hardware group started posting teasers about a new device a few weeks ago.

It is the Microsoft Arc Touch Mouse, and at long last, the company is putting us out of our misery by announcing it today. It's a new type of travel mouse, not a desktop mouse. Despite the use of "touch" in the name, it's actually not a direct competitor to Apple's fully touch-enabled Magic Mouse, although Microsoft is hinting that it still might have one of those in the works.

The left and right buttons on the Arc Touch Mouse are not-touch sensitive, but between them is a touch-sensitive strip that approximates the effect (and the sound) of a physical scroll wheel.

Paul Maritz (Credit: EMC Corp.)

Paul Maritz is no ordinary former Microsoftie. As a high-ranking executive in the 1980s and 1990s, he was right behind Bill Gates and Steve Ballmer, responsible for Windows and other top Microsoft products, and at the center of some of the company's biggest competitive rivalries and controversies.

In other words, if he were still at the company, he would have been in the middle of Microsoft's decision to take out a full-page ad in USA Today this week, urging customers of VMware not to lock themselves in to a three-year contract with the virtualization technology company.

Of course, Maritz is not at Microsoft anymore. He's the CEO of VMware -- a situation that has made the rising competition between the companies interesting and, at times, very funny to watch. The irony clearly wasn't lost on Maritz when he was asked about the USA Today ad by reporters at the VMworld conference yesterday.

Woolley-Wilson

Dreambox Learning has hired Jessie Woolley-Wilson as its new CEO, an appointment that comes four months after the Bellevue online education startup sold out to an investment syndicate that included The Charter Fund and Netflix CEO Reed Hastings. Woolley-Wilson has spent the past two decades working in the online education field. Most recently, she served as president of K-12 at Blackboard Inc. Before that, she served as executive vice president of LeapFrog Enterprises and president of LeapFrog SchoolHouse.