SIGHTSOUND TECHNOLOGIES SUCCESSFULLY SETTLES PATENT CASE
17 February 2004
SIGHTSOUND TECHNOLOGIES SUCCESSFULLY SETTLES PATENT CASE AGAINST CDNOW AND N2K
February 23, 2004, PITTSBURGH - SightSound Technologies Inc. announced today that it has reached a final settlement in its patent infringement litigation against CDnow and N2K.
In the settlement, CDnow and N2K acknowledged that the United States Patents 5,191,573; 5,675,734; and 5,966,440 are valid and enforceable, and paid SightSound Technologies US$3,300,000, without conceding infringement or other liability resulting from their prior activities in the music download business. A Final Order and Judgment on Consent in accordance with the settlement was entered by Chief Judge Donetta W. Ambrose of the United States District Court for the Western District of Pennsylvania on February 20, 2004.
William Wells of Kenyon & Kenyon, lead counsel for SightSound Technologies, commented on the outlook for SightSound. " Resolution of this dispute, after six years of vigorous litigation, is momentous. SightSound can now look forward with renewed strength to licensing those in the music and movie industry who seek to employ SightSound`s patented technology in downloading digital music and movies over the Internet."
" When we made the world`s first electronic sale of music downloads in 1995 and the first electronic sale of feature film downloads in 1999, we changed the way consumers access entertainment, and our patents gave us the power to change the business practices of an entire industry," said Scott Sander, SightSound Technologies President and CEO. " Our success today indicates that the industry has entered a new era of respect for intellectual property, both copyrights and patent rights."
About SightSound Technologies
Eighteen years ago Arthur R. Hair invented a method and system for the electronic sale of digital audio and video recordings. After he received his first patent, Arthur Hair and Scott Sander founded SightSound Technologies. As a pioneer of movie and music eCommerce, SightSound Technologies achieved many historic firsts. In 1988 Arthur Hair filed for his first patent on movie and music eCommerce, in 1995 SightSound Technologies sold the world`s first downloadable music and in 1999 sold the world`s first downloadable feature film.
SightSound Technologies has continued to expand its intellectual property holdings and is the owner of 11 of Arthur Hair`s patents; United States Patents 5,191,573, 5,675,734, and 5,966,440 in the field of audio/video eCommerce; United States Patent 6,014,491, New Zealand Patent 337334, Singapore Patent 67158, Australia Patent 752057, and China Patent 1252917 in the field of video/audio compression; and United States Patent 6,615,349, New Zealand Patent 502871, and Singapore Patent 93860 in the field of applied encryption. SightSound Technologies also owns Arthur Hair`s patent applications filed in the field of trusted and decentralized peer-to-peer networks.
Today, SightSound Technologies supports the music and movie industries as they adopt digital distribution by licensing its patented technologies in the fields of audio/video eCommerce, audio/video compression and applied encryption.
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Music e-tailers agree to play SightSound`s tune
Settlement reached before case went to federal district court
By PAUL SWEETING
WASHINGTON -- In an accord with wide-reaching implications for the music and movie download biz, Bertelsmann Music subsids CDNow and N2K have agreed not to contest a series of patents held by SightSound Technologies covering the commercial downloading of music over the Internet.
Agreement, part of an out-of-court settlement reached over the weekend in SightSound`s patent infringement case against the online music retailers, paves the way for Mt. Lebanon, Pa.-based SightSound to challenge other online merchants offering paid downloads of movies and music, including such studio-backed initiatives as Movielink and Apple`s iTunes service.
" Resolution of this dispute, after six years of vigorous litigation, is momentous," said SightSound attorney William Wells. " SightSound can now look forward with renewed strength to licensing those in the music and movie industry who seek to employ SightSound`s patented technology in downloading music and movies over the Internet."
Patents upheld
As part of the agreement, CDNow and N2K accepted a consent order issued by the court under which the SightSound patents are deemed " valid and enforceable."
The retailers did not acknowledge any prior infringing activity related to their sale of music downloads, but agreed to pay SightSound $3.3 million.
Settlement was reached one week before the case was scheduled to go before a jury in federal district court in Pittsburgh.
" This matter does not affect our core business, which is the sale of CDs through traditional and online sales channels," said a CDNow spokeswoman. " This settlement does, however, position us well for the future if we wish to engage in the sale of downloaded music."
Case dates to 1998, when SightSound sued N2K for patent infringement after N2K began offering paid downloads as part of a deal with Liquid Audio. N2K was later acquired by CDNow, which in turn was bought by Bertelsmann and merged into BMG Online.
Earlier rulings followed
In a series of earlier rulings, the court upheld the patents` application to Internet downloads and denied CDNow`s motions for dismissal of the case.
SightSound prexy and co-founder Scott Sander said Monday that the company has already been approached by several parties interested in acquiring the patent portfolio
" We realize that someone bigger than us might have to have these patents for the industry to really move ahead," Sander said. " We hope that with our success today the industry has entered a new era of respect for intellectual property, both copyrights and patent rights." .
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