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CNET News
P2P company sues RIAA over patent
By John Borland
Staff Writer, CNET News.com
http://news.com.com/2100-1027-5357332.html
Story last modified September 8, 2004, 5:45 PM PDT
Altnet, a company that sells music and other digital goods through
file-swapping services, sued the Recording Industry Association of America
on Wednesday for alleged patent infringement.
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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R. A. Hettinga