Written by

Brandon Shalton

24-Feb-2004

Links to external articles covering the settlement:

25-Feb | Mlive.com

24-Feb | Hoovers

24-Feb | Miami Herald

Intra-Day and Intra-Article posts found on the homepage in my plog (patent log).

There can be only one.

For those who have been following along with this website, you'll know that there are 3 companies in the same space of making claims against digital audio.

Acacia claims the patent to downloading audio/video.

USA Video claims the patent to downloading video faster than real time.

SightSound claims the patent for the paid downloading of audio/video.

As you can tell, there is some overlap here, especially if you are a website that sells streaming videos (ie. video on demand, membership site with videos, etc) where you are technically violating all three patents.

It does seem to be quite a paradox to have more than 1 patent covering the same idea, but in talking to some patent attorneys, it's not uncommon.

This just in: SightSound Technologies Successfully Settles Patent Case Against CDnow and N2K.

From the PR:

"PITTSBURGH, Feb. 24 /PRNewswire/ -- SightSound Technologies Inc. announced today that it has reached a final settlement in its patent infringement litigation against CDnow and N2K.
In the settlement, CDnow and N2K acknowledged that the United States Patents 5,191,573; 5,675,734; and 5,966,440 are valid and enforceable, and paid SightSound Technologies US $3,300,000, without conceding infringement or other liability resulting from their prior activities in the music download business. A Final Order and Judgment on Consent in accordance with the settlement was entered by Chief Judge Donetta W. Ambrose of the United States District Court for the Western District of Pennsylvania on February 20, 2004."

It will be interesting to see what SightSound will do with its patent and this settlement. Porn websites that are member based (ie. monthly membership fee) could technically fall within this patent. Video-on-Demand sites that offer pay-per-minute or video downloads (ie. CinemaNow.com, MovieLink.com, etc) could find themselves faced with paying licenses to two or more patent holders.

CinemaNow.com signed a license with Acacia and MovieLink.com is currently being sued by USA Video.

How will these and other businesses react to having to pay ANOTHER licensing agreement for the same thing?

Is this a patent paradox or just patently absurd?

Updated 25-Feb:

From a Hoovers article:

SightSound prexy and co-founder Scott Sander said Monday that the company has already been approached by several parties interested in acquiring the patent portfolio.

"We realize that someone bigger than us might have to have these patents for the industry to really move ahead," Sander said. "We hope that with our success today the industry has entered a new era of respect for intellectual property, both copyrights and patent rights."

With Acacia's "marketing" of their DMT patent and the recent (disturbing) news of BMG settling, it truly is a "new era" where business models will revolve around licensing and litigation as observed in my Sept 2, 2003 article titled 'Mo Patents, Mo Money: Making money by licensing patents'

from an Mlive.com article:

"We changed the way consumers access entertainment, and our patents gave us the power to change the business practices of an entire industry," said Scott Sander, president of SightSound.

oh really?