SightSound Technologies has settled a patent infringement lawsuit against CDNow and N2K, in which the latter two companies paid SightSound $3.3 million without conceding any infringement "or other liability resulting from their prior activities in the music download business," SightSound announced February 24.
The settlement involved CDNow and N2K acknowledging a group of SightSound patents on music and video downloading technologing were valid patent claims, according to an order accepted by a federal judge here February 20.
"Resolution of this dispute, after six years of vigorous litigation, is momentous," said SightSound lead attorney William Wells in a statement. "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."
Brandon Shalton, whose FightThePatent.com has served as an information/activism site involving the Acacia Research Corp. streaming media patent claims litigation against several adult Internet companies, said it should be "interesting to see" where SightSound goes from here with its patents
"Porn Websites that are member based…could technically fall within this patent," Shalton said in comments on his own site. "Video-on-Demand sites that offer pay-per-minute or video downloads could find themselves faced with paying licenses to two or more patent holders…How will these and other businesses react to having to pay another licensing agreement for the same thing? Is this a patent paradox, or just patently absurd?"
SightSound chief executive officer Scott Sander said in his own statement that his company had changed the way consumers access entertainment. "Our success today," he continued, referring to the lawsuit settlement, "indicates that the industry has entered a new era of respect for intellectual property, both copyrights and patent rights."
New Destiny/Homegrown Video chief Spike Goldberg, who is challenging the Acacia streaming media patent claims in court, said the SightSound settlement indicates mostly that there are "obvious flaws in the patent process," and thought CDNow and N2K "probably had a big fight on their hands, and nobody was there to help them."
Greg Clayman, chief of another Acacia challenger, VideoSecrets, agreed with Goldberg. "This is not something that's easy to deal with from a cost standpoint," he said.
Sander co-founded SightSound with Arthur Hair, after Hair received his first patent for electronic sale of digital audio and video, and the company sold what they call the world's first downloadable music in 1995 and first downloadable feature film in 1999.
