The Battle Over Online Music
`
`GEAR SCIENCE ENTERTAINMENT BUSINESS SECURITY DESIGN OPINION VIDEO INSIDER MAGAZINE SUBSCRIBE
`
`TECH BIZ : MEDIA
`
`The Battle Over Online Music
`
`Jennifer Sullivan
`
` 01.29.99
`
`Sightsound.com, a tiny company that owns a patent for selling music through online downloads, is
`demanding that other music companies pay licensing fees or face patent-infringement lawsuits.
`The Mt. Lebanon, Pennsylvania, company has already sent formal warnings to some music sites,
`including MP3.com, one of the main hubs for downloading music files.
`
`"We're highly confident in the validity of our intellectual property," said Scott Sander, chief executive
`at Sightsound.com. "We have two US patents that control the sale of downloadable music. We're not
`trying to slow [the Internet music industry] down. We're trying to speed it up."
`
`But some companies said they'll challenge Sightsound.com's patents and put up a serious fight before
`paying licensing fees.
`
`The brewing fight once again raises the question of how competent the US Patent and Trademark
`Office is in handing out exclusive rights to basic technologies underlying the Internet. If
`Sightsound.com's patents are upheld in court, it could exact a toll from the entire online music
`industry.
`
`That prospect hasn't been lost on the traditional music industry. The Recording Industry Association
`of America, or RIAA, no friend to the online music movement, said Sightsound.com very likely will
`have to fight to get its money.
`
`"At this point, the validity of these patents is almost certain to be challenged," said an RIAA
`spokeswoman. She declined to say whether the association would file suit.
`
`Sightsound.com creates Web sites for other companies that want to sell music online. It claims its
`patents cover the idea of selling audio and video files through downloads. On Wednesday,
`Sightsound.com sent cease and desist letters to four Internet music companies including MP3.com,
`Platinum Entertainment (PTET), GoodNoise (GDNO), and Amplified.com.
`
`Christopher Reese, vice president and general counsel for Sightsound.com, asked the sites to either
`pay a 1 percent royalty on all revenue from online music sales, or to "immediately cease and desist."
`"They didn't do their homework," said Michael Robertson, president of MP3.com. Robertson said his
`site doesn't infringe on the patents because it doesn't sell music files or players over the Net.
`MP3.com, which runs a record label, offers free downloads to promote the physical CDs it sells. "This
`is nothing more than a money play."
`
`Robertson said he doesn't know what he'll do next.
`
`Meanwhile, other companies are willing to go along, just to avoid legal hassles.
`
`"It seemed like good insurance," said Howie Singer, chief technology officer at a2b, a music software
`publisher that agreed to go along with Sightsound.com's request last June.
`
`This isn't the first time Sightsound.com has tried to enforce its patents. The company is suing Web
`CD retailer N2K over its e-mod software for playing downloadable music.
`
`It's also not the first time a controversial patent has embroiled a lucrative niche of the technology
`industry. Online auctioneer Priceline.com, for example, has patented the idea of applying reverse
`auctions to the Internet. Some experts say the patent office was wrong to give one company exclusive
`rights to the digital form of an idea pervasive before the Internet existed.
`
`In general, the patent holder usually has the legal advantage. But in this case, a defendant likely will
`be able to show in court that the idea of downloadable music was floating around before
`Sightsound.com patented it.
`
`"There's a good chance there's [prior] art out there to bust the thing," said Greg Aharonian, a patent
`consultant.
`
`Earlier Internet-like technologies like France's Minitel and Videotext, a failed interactive TV project
`in the early 1980s, flirted with the idea of sending music through electronic networks, for example.
`Even venerable Bell Labs experimented with online jukeboxes.
`
`"Based on a very preliminary review of the patents, I think they probably could be attacked a number
`of different ways," said Brad Biddle, counsel for MP3.com.
`
`http://www.wired.com/techbiz/media/news/1999/01/17609[5/2/2013 1:54:56 PM]
`
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`
`Page 00001
`
`
`
`GEAR SCIENCE ENTERTAINMENT BUSINESS SECURITY DESIGN OPINION VIDEO INSIDER MAGAZINE SUBSCRIBE
`
`TECH BIZ : MEDIA
`
`The Battle Over Online Music
`
`Jennifer Sullivan
`
` 01.29.99
`
`Sightsound.com, a tiny company that owns a patent for selling music through online downloads, is
`demanding that other music companies pay licensing fees or face patent-infringement lawsuits.
`The Mt. Lebanon, Pennsylvania, company has already sent formal warnings to some music sites,
`including MP3.com, one of the main hubs for downloading music files.
`
`"We're highly confident in the validity of our intellectual property," said Scott Sander, chief executive
`at Sightsound.com. "We have two US patents that control the sale of downloadable music. We're not
`trying to slow [the Internet music industry] down. We're trying to speed it up."
`
`But some companies said they'll challenge Sightsound.com's patents and put up a serious fight before
`paying licensing fees.
`
`The brewing fight once again raises the question of how competent the US Patent and Trademark
`Office is in handing out exclusive rights to basic technologies underlying the Internet. If
`Sightsound.com's patents are upheld in court, it could exact a toll from the entire online music
`industry.
`
`That prospect hasn't been lost on the traditional music industry. The Recording Industry Association
`of America, or RIAA, no friend to the online music movement, said Sightsound.com very likely will
`have to fight to get its money.
`
`"At this point, the validity of these patents is almost certain to be challenged," said an RIAA
`spokeswoman. She declined to say whether the association would file suit.
`
`Sightsound.com creates Web sites for other companies that want to sell music online. It claims its
`patents cover the idea of selling audio and video files through downloads. On Wednesday,
`Sightsound.com sent cease and desist letters to four Internet music companies including MP3.com,
`Platinum Entertainment (PTET), GoodNoise (GDNO), and Amplified.com.
`
`Christopher Reese, vice president and general counsel for Sightsound.com, asked the sites to either
`pay a 1 percent royalty on all revenue from online music sales, or to "immediately cease and desist."
`"They didn't do their homework," said Michael Robertson, president of MP3.com. Robertson said his
`site doesn't infringe on the patents because it doesn't sell music files or players over the Net.
`MP3.com, which runs a record label, offers free downloads to promote the physical CDs it sells. "This
`is nothing more than a money play."
`
`Robertson said he doesn't know what he'll do next.
`
`Meanwhile, other companies are willing to go along, just to avoid legal hassles.
`
`"It seemed like good insurance," said Howie Singer, chief technology officer at a2b, a music software
`publisher that agreed to go along with Sightsound.com's request last June.
`
`This isn't the first time Sightsound.com has tried to enforce its patents. The company is suing Web
`CD retailer N2K over its e-mod software for playing downloadable music.
`
`It's also not the first time a controversial patent has embroiled a lucrative niche of the technology
`industry. Online auctioneer Priceline.com, for example, has patented the idea of applying reverse
`auctions to the Internet. Some experts say the patent office was wrong to give one company exclusive
`rights to the digital form of an idea pervasive before the Internet existed.
`
`In general, the patent holder usually has the legal advantage. But in this case, a defendant likely will
`be able to show in court that the idea of downloadable music was floating around before
`Sightsound.com patented it.
`
`"There's a good chance there's [prior] art out there to bust the thing," said Greg Aharonian, a patent
`consultant.
`
`Earlier Internet-like technologies like France's Minitel and Videotext, a failed interactive TV project
`in the early 1980s, flirted with the idea of sending music through electronic networks, for example.
`Even venerable Bell Labs experimented with online jukeboxes.
`
`"Based on a very preliminary review of the patents, I think they probably could be attacked a number
`of different ways," said Brad Biddle, counsel for MP3.com.
`
`http://www.wired.com/techbiz/media/news/1999/01/17609[5/2/2013 1:54:56 PM]
`
`SERVICES
`
`Subscribe to WIRED
`Renew
`Give a gift
`Customer Service
`
`Subscribe to WIRED
`Renew
`Give a gift
`International Orders
`
`Quick Links: Contact Us | Login/Register | Newsletter | RSS
`Feeds | Tech Jobs | Wired Mobile | FAQ | Sitemap
`
`Page 00001
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`The Battle Over Online Music
`
`HotBot has a marketing agreement with Z Company, the parent company of MP3.com. Wired
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`23.Jan.99
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