Last week's $3.3 million settlement of a patent dispute appears to strengthen claims by SightSound Technologies that some of its US patents cover the basics of purchasing music and videos online. This will surely add to the controversy surrounding patents of "business methods" and may have important implications for the entertainment industry, which is already embroiled in a fierce battle with file-sharers.
Mike Crissey of the Associated Press said that the settlement ends "a six-year court battle between suburban Pittsburgh-based SightSound Technologies and CDNow over three patents that SightSound claimed were the business model for selling music and video online. The patents, which were issued between 1993 and 1999, describe what seems to be commonplace today on pay music sites like Apple's iTunes and Napster.... Under the settlement, CDNow - a company formerly based in Fort Washington, Pa., and now owned by a German media giant Bertelsmann AG - agreed that the patents were valid but did not concede it violated them with its own music downloading business. SightSound also sued N2K, which was bought by CDNow in 2000..."
The US patents in question are numbers 5,191,573, 5,675,734 and 5,966,440. SightSounds' website says, "'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...'" (!)
Click here to read the court's Final Order in the CDNow case.