September 8, 2004 5:45 PM PDT
P2P company sues RIAA over patent
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The company, a subsidiary of Brilliant Digital Entertainment, contends that the RIAA has been infringing on one of its patents in the course of copyright enforcement efforts inside peer-to-peer networks. Overpeer, a copyright company owned by Loudeye, and MediaDefender, also are named in the lawsuit.
"We've exhausted every means of trying to work with these defendants and those they represent to patiently encourage and positively develop the P2P distribution channel," said Altnet Chief Executive Officer Kevin Bermeister in a statement. "We cannot stand by and allow them to erode our business opportunity by the wholesale infringement of our rights."
The patent infringement suit comes as one of the sideshows in an ongoing legal battle over peer-to-peer networks that has led to piracy charges against technology companies and antitrust claims against record companies, and that now appears to be headed ultimately to Congress for resolution.
Altnet and Brilliant Digital Entertainment are joint venture partners with Sharman Networks, the Australian company that owns the Kazaa software. The company has been trying for several years to persuade record labels and music studios to allow Altnet to sell authorized versions of their products through the Kazaa file-swapping network.
The big entertainment companies have unanimously said no, however. They've lost recent court battles that aimed to put companies like Sharman out of business, but are now seeking legislation that would revive their claims against file-swapping ventures.
Altnet has also been seeking other funding sources and ways to strike back at the record labels' efforts to undermine peer-to-peer networks.
In the summer of 2003, it announced that it had purchased patent rights to the process of identifying files on a peer-to-peer network using a "hash," or digital fingerprint based on the contents of the file.
Initially, Bermeister indicated the company would approach other file-swapping companies to sign them up for licenses. That proved controversial, but Altnet did send cease-and-desist letters last November to nine companies engaged in businesses related to peer-to-peer networks.
Some of these, such as data collection company Big Champagne, said they weren't using any technology that would infringe on the Altnet patent. An attorney for Altnet said the disputes with most of the nine had been resolved.
Altnet's lawsuit says that antipiracy companies Overpeer and MediaDefender are still on the hook, however. Overpeer is a "spoofing" company that posts millions of false or corrupted files on networks such as Kazaa, trying to make real files harder to find. Media Defender uses "interdiction" techniques, which essentially clog networks with requests that block real download efforts.
Both of these services use unauthorized versions of Kazaa and the underlying FastTrack peer-to-peer technology, and so are using Altnet's patent without permission, the company contends.
In its complaint, Altnet said that RIAA executives had been notified several times in 2003 about the patent, but that the trade group has continued to support Overpeer and to conduct its own enforcement efforts on the Kazaa network without permission.
Overpeer said it did not believe it had infringed on Altnet's patents.
"We vigorously deny these claims and find them to be completely baseless and without merit," said Marc Morgenstern, who heads Loudeye's Overpeer division, in a statement.
Representatives from the RIAA could not immediately be reached for comment.
Altnet and Brilliant Digital Entertainment have been skating on thin financial ice in recent years. In its last quarterly report to federal regulators, Brilliant said it had just $509,000 in cash on hand.
An attorney representing Altnet said that financial considerations would not impede the company's attempt to enforce the patent, however.The lawsuit was filed in a Los Angeles federal court.
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