Indeed, the industry should be thankful that it does, said Scott Sander, president, CEO and co-founder of the company. "We are trying to accelerate digital download," he said. "If Sightsound.com didn't exist, then the true tone of the debate would have been set by the music giants and physical distribution would still be the rule."
The patents, in effect, give Sightsound.com the power of veto over any scheme created by the Recording Industry Association of America (RIAA), said Sander, and that's a good thing. "Our concern was that that SDMI would be used by the RIAA to slow down the move towards digital download by locking everyone else," he said. The RIAA has formed the Secure Digital Music Initiative to standardise on a way to distribute music over the Internet that prevents piracy.
So is Sightsound.com just a good Samaritan of the music industry?
Perhaps, said James Diboise, patent attorney at Wilson, Sonsini, Goodrich & Rosati, the firm that represents Diamond Multimedia Systems Inc. against the RIAA. "Certainly, if that is their goal, it is one that people would like," he said. "Charging licensing fees goes against the grain about what is done over the Internet, though."
Gene Hoffman, president and CEO of GoodNoise, thought the move would be worse for the little guys. "It is bad for the artists," he said. Yet, Sander thought the move was necessary to stave off the industry giants. "We could easily be the poster child of why business needs patents," he said. "Otherwise, the winners at the end of the day would be Microsoft and the record companies."
Sightsound stated that two patents -- U.S. Patent 5,191,573 filed in 1990 and granted in 1993 and U.S. Patent 5,675,734 filed in 1996 and granted in 1997 -- cover the digital distribution of audio and video recordings. According to the missive sent to digital music site MP3.com, the patents "control, among other things, the sale of audio or video recordings in download fashion over the Internet."
The missive was sent to three other music companies, said a Sightsound statement -- Platinum Entertainment, Amplified.com, and GoodNoise Corp. -- inviting them to join Sightsound's Limited Patent Licensing Program at a cost of 1 percent of the download cost to customers.
GoodNoise's Hoffman had not seen the letter and did not know how his company would respond. Bill Paige, a spokesman for Platinum Entertainment, said that his company had received the notice, but did not believe it applied to Platinum. "We feel that the claims are without merit as we do few actual downloads," he said. Officials at Amplified.com could not be reached for comment.
It is uncertain whether Sightsound's patents will stand up in a court of law. Currently, the company is suing music site N2K Inc. for alleged violations of the patents. That suit is still in the discovery phase, said Sightsound's Sanders.
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