January 28, 1999 4:20 PM PST

Sightsound.com takes on MP3.com

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Sightsound.com today sent a letter to MP3.com contending that it owns the patent that controls the sale of audio and video recordings distributed on the Internet.

The claim is the latest example of a patent dispute on the Net. It comes just two weeks after MP3.com got $11 million in financing.

"[As a result of this patent], we'd like to invite you to join our limited patent licensing program," Sightsound.com general counsel Christopher Reese said in a letter to MP3.com president Michael Robertson.

"Please understand that if you do not become an authorized licensee, you must immediately cease and desist from selling music, or other audio recordings, over the Internet in download fashion," the letter said.

But Brad Biddle, vice president of business development and general counsel for MP3.com, noted that the site doesn't sell music downloads--the tracks available on the site are free.

"We don't really see selling music downloads as the future of digital music," Biddle said today, noting that the fact that Sightsound sent MP3.com the letter discredits its claim.

"Come on--do your homework guys. Look at the site and you'll see the patents don't apply to us," Biddle said. He characterized Sightsound's claims as "troubling on a lot of different levels."

Sightsound.com said royalty rates for the license makes up 1 percent of the total price charged to customers per transaction for the download sale of music or other audio recordings. The company cited patents 5,191,573 and 5,675,734 in its letter.

Biddle said MP3.com is "certainly interested in Sightsound's claims. They own 1 percent of all music downloads online?

"The patent system increasingly looks broken in terms of the Net," he added.

Sightsound.com was founded in 1995 by engineer Arthur Hair and entrepreneur Scott Sander.

"Since 1993, we have been warning the major owners of audio recordings that, by the late 1990s, anyone with a PC will be able to steal CD music at will," Sander said in a statement today. "Our commitment to an open, secure standard for the digital download of entertainment and our ability to offer the protection of two U.S. patents will make Sightsound.com a vital ally of SDMI and will be benefical to artists, labels, and, ultimately, consumers."

SDMI refers to the Secure Digital Music Initiative, which is meant to protect the rights of artists and their intellectual property on the Internet.

Biddle added that Sightsound "should have realized that when someone sends a letter like that, we just post it and let the Net weigh in."

Message boards at MP3.com were brewing with responses.

"This guy is blowing smoke," wrote one poster. "Though I am not a lawyer, I would think it would be difficult to patent the sale of music files on the Internet. You might be able to patent a METHOD of selling music downloads, but patenting an MP3 download for profit would seem like patenting pre-existing chunks of the Internet. Both the practice of online sales and file downloading have been around for some time, and I don't know why combining the two practices is something that qualifies as being worthy of a patent.

"The more I think about this, the more it sounds like a scam," the person added.

"This is outrageous," wrote another poster. "It sounds to me like they're trying to pull a fast one."

Another MP3.com message board participant was less forgiving: "The patent examiner should be taken out and shot."

 

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