Microsoft settles music download suit

Last October, the small company sued a European division of Microsoft, along with the HMV Group, Internet service provider Tiscali and digital music company On Demand Distribution (OD2), charging them with violation of a patent that covers the downloading of information onto a tangible object such as a CD. Music download services operated by the four companies allowed consumers to burn downloaded music to a CD.

The settlement terms include past and future rights to use the patent anywhere in the world, E-Data said in a statement. Financial terms were not disclosed.

"We are quite pleased with this settlement, as it further reinforces the scope and validity of (our) patent in Europe," said E-Data Chairman Bert Brodsky in a statement. "While the OD2 service is still in the nascent stage…the agreement sends an important message to other companies infringing upon our intellectual property."

The patent is one of several that cast some financial uncertainty over the young digital media business. Other companies, including Acacia Research and SightSound Technologies, have said that they own broad rights to such processes as streaming digitally archived media such as music or video, or even selling access to audio and video over a telephone line .

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E-Data is characterizing the suit's settlement as an explicit shot across the bow of other download services--Brodsky specifically cites Apple Computer's iTunes--that are planning to enter the European market.

"We are currently in talks with a number of prominent companies in Europe infringing upon our intellectual property, and may seek injunctions against these companies if necessary," Brodsky said.