January 7, 2000 1:10 PM PST

No ruling in Real, Streambox lawsuit

A U.S. District Court judge has decided not to rule on whether to grant RealNetworks a permanent injunction against Streambox, citing a need for more time to examine the case.

Judge Marsha J. Pechman today extended the temporary injunction granted to RealNetworks and requested that both companies file findings of fact and findings of law by Jan. 12. Pechman will make her official ruling Jan. 17.

The decision comes about a week after the judge granted RealNetworks a temporary injunction to block the sale and distribution of Streambox's products. RealNetworks' lawsuit alleged that Streambox had violated the Digital Millennium Copyright Act and copyright infringement laws.

The questionable products involved in the lawsuit are the Streambox Ripper, which converts CDs into the popular MP3 format and into Windows Media, and StreamboxVCR, which "records" RealNetworks audio streams for playback.

"We're extremely pleased that the judge continued to enjoin the distribution of the three Streambox products, and we look forward to her final ruling on the matter 10 days from now," Alex Alben, RealNetworks vice president of government affairs, said in an interview.

Streambox chief executive Bob Hildeman responded favorably to today's ruling, saying it is better for the judge to understand all of the technological implications before deciding on a case of this magnitude.

"If RealNetworks wins, then everyone will be forced into RealNetworks' closed system, so there won't be any compatible players," Hildeman said in an interview. "The consumer and content owners will be locked in, and they won't have any choice."

RealNetworks is embroiled in a heated battle with arch-rival Microsoft over the control of media delivery over the Internet. Although its technology has nearly become a de facto standard, the company remains under pressure from Microsoft's Windows Media streaming technology.

In addition, several industry players, many backed by Microsoft, are nipping into RealNetworks' market. Microsoft last week invested $30 million in rival streaming provider Intervu. This adds to its $48 million stake in LoudEye, previously called Encoding.com, which converts audio and video into formats that can be delivered over the Internet.

But RealNetworks is taking full advantage of its position and now wants to become the centerpiece of a burgeoning Internet music market. Just today, RealNetworks forged a partnership with recording giant Universal Music Group to allow users of its RealJukebox software to access and download UMG's extensive catalog of recordings.

Earlier this week, RealNetworks extended its contract with Yahoo Broadcast, the Web portal giant's Web broadcast and programming division.

These moves come after a recent overhaul of RealNetworks' home page, Real.com, into a full-fledged destination for music and video downloads and streams. At that time, the company also released a new version of its RealPlayer that features more content programming directly on the software.

Edging more closely toward becoming a content provider has come with its share of headaches. Last November, Warner Bros. Online dropped RealNetworks in favor of Microsoft after a bitter dispute over Webcast branding, sources said.

 

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