Real wins temporary injunction in copyright suit

A U.S. District Court judge has granted a temporary injunction against Streambox in a lawsuit filed against the software maker by RealNetworks last week.

In the lawsuit, Seattle-based RealNetworks charged Streambox with violation of the Digital Millennium Copyright Act, copyright infringement and unfair competition, among other allegations. The suit is focused on three Streambox software products, including a product called the Ripper--software that converts CD and RealAudio files to the popular MP3 format--and another called the VCR, which records streaming media.

RealNetworks, a dominant streaming media company whose software allows both audio and video to be transmitted over the Internet, is facing stiffer competition on several fronts. RealNetworks has seen its turbulent relationship with Microsoft--which pushes an incompatible streaming media format--become increasingly fierce. In addition, several new players, many backed by Microsoft, are encroaching upon RealNetworks' market.

Just last week, Microsoft took a $30 million stake in streaming pioneer Intervu. The software giant also joined an investment coalition that pumped $48 million into LoudEye, previously called Encoding.com, which converts music and video into formats that can be distributed over the Net.

With the impending mainstreaming of broadband and satellite Internet connectivity, streaming media applications and content are likely to generate even more interest and prove a windfall to these Net broadcasters.

In a statement issued late yesterday, RealNetworks said: "We are pleased that the judge has granted our request and issued a temporary restraining order against Streambox. Both our lawsuit and the judge's actions demonstrate the importance of intellectual property rights in the digital age."

A representative for RealNetworks could not be reached for comment.

Redmond, Wash.-based Streambox said it is merely "considering the consumer's needs first," chief executive Bob Hildeman said in an interview.

But content rights management--the protection of copyrights and intellectual property--for music and video broadcast over the Internet and its ability to be downloaded has been a sore spot for both makers of Internet download technologies and content providers, led by the major recording studios.

"The issues that are touched by streaming technologies--like rights management, pay-per-view capabilities and security--are pretty paramount," said Jeremy Schwartz, a senior analyst at Forrester Research. "Record labels, and in the possible near future movie studios, want to make sure that their digital content can be rented or bought without the consumer's ability to pass it on to someone else."

The "Big Five" record labels--Warner Music, Sony Music, Universal Music, BMG and EMI--are working with the Recording Industry Association of America and several technology firms on a Secure Digital Music Initiative (SDMI). The initiative is an effort to allow music downloads while protecting copyrights.

In its own statement, Streambox said: "We have fully complied with this restraining order and we look forward to our day in court. The issues are about file format, content and consumer rights, and business models."

Streambox also said that the court ordered RealNetworks to post a $1 million bond to cover any loss to Streambox if the "court later finds that the restraining order was wrongfully issued."

Streambox said it plans to release versions of its Streambox Ripper and Streambox Ferret products that do not violate the court's restraining order.

RealNetworks has a licensing agreement with Snap.com, a joint venture between CNET and General Electric's NBC. CNET is the publisher of News.com.

News.com's Sandeep Junnarkar contributed to this report.