Saturday, July 30, 2011

86. Spotify Welcomed to the U.S. with a Patent Infringement Lawsuit

[Article first published as Picking on the New Kid: Spotify Sued for Patent Infringement on Blogcritics.]


We here in the United States are a litigious sort, and have become increasingly more so with further advances in technology and more filings of patent applications. I’ve written a couple of things on lawsuits regarding technology and patents since I started writing about games and tech, and those few articles may actually only cover 0.0001% of all of the tech legal action that has occurred since 2009.

You see over the years the practice has become so farcically common that there’s no way I can keep up on the topic without giving it a dedicated blog of its own, updated daily. Actually, five or six times daily would probably be required to get it done. Tech lawsuit news almost always involves the world’s technical giants, namely Apple, Oracle, and any one of the companies that manufacture anything running an Android OS. So did Spotify, a company that provides a digital music service, expect to be part of the lawsuit club when they hopped on their boats and sailed over from Europe to the new world?

Expected or not, Spotify joined the club earlier this week, and got slapped with a lawsuit from PacketVideo, a company that produces software that allows users to wirelessly stream music and video. They are accusing Spotify of patent infringement, specifically US patent 5,636,276. The patent in question describes a “Device for the Distribution of Music in Digital Form,” which PacketVideo claims is the technology that enables Spotify’s cloud based service to even exist. But that’s not all – they insist that they informed Spotify in May about their ownership of this patent, but the complaints were completely ignored. Either as revenge of a friendly "welcome to America" gift, PacketVideo's goal is to win a judgment for willful violation and have the courts put a permanent injunction (as in the ban hammer) on Spotify in the US, unless of course some licensing fees and royalties start flowing PacketVideo’s way.

Spotify is a popular service that has been around in Europe since 2008, and after a long wait and users foaming at the mouth while they started signing US music labels, finally launched in the US last week. They already have deals with Sony and other major labels in place. They offer a free service for streaming licensed music, which is kept free through advertisements, which also allows users to listen to their playlists anywhere they have a Spotify client set up. Paid options are also available that drop the ads and allow users to stream without a web connection over a cell phone or mobile device. That last part may be where PacketVideo has some issues.

But Spotify maintains that their technologies are fully proprietary. In a statement to CNET, a Spotify representative said: "In just under three years, Spotify has become more popular than any other music service of its kind. This success is, in large part, due to our own highly innovative, proprietary hybrid technology that incorporates peer-to-peer technology. The result is what we humbly believe to be a better music experience-lightning fast, dead simple and really social.” They will naturally be contesting the accusations.

Even if there seems to be sufficient evidence for the lawsuit based on how long PacketVideo’s been in business and the fact that they were one of the biggest startup companies of their time, there is some counter evidence to be taken into account. First off, this patent wasn’t something they even made themselves. They bought the patent a few years ago when they acquired a Swiss company called Basel, and actually developed nothing themselves. Based on that, it doesn’t seem right for PacketVideo to claim infringement against Spotify, especially when that claim is so sweeping and unspecific. Then again, this isn't about what's right, it's about money.

Spotify is actually a very innovative service, which they developed themselves and have been executing well across the pond for a while now. If this infringement was actually something serious enough to warrant a permanent injunction, why wait until now to sue? The Basel acquisition meant that PacketVideo now operated in Europe, in the same neighborhood where Spotify planted its roots. They could have filed suit anytime since 2008. It seems a little suspect that the timing lines up with when Spotify started expanding their service area across the Atlantic - lines up to the tune of about 2 weeks for those keeping score.

This is just another entry in the long line of lawsuits rooted in old, ridiculously broad scoped patents. This is the type of activity that potentially punishes those who truly innovate and come up with new things by holding them subject to infringement suits from archaic patents that shouldn't have held any water to begin with. Filing a patent for an idea (which is all that this was) that has no meat, method of execution or even technological means at the time will ultimately stifle future technological creativity for fear of legal action. Even the FTC has recognized that patent lawsuits similar to this are a problem in today's marketplace (kinda large-ish PDF). So does PacketVideo's case hold water? Or does it all smell a bit too much like another troll's moved in under the bridge? You decide.

In the meantime I'm just going to be over here filing a patent application for a device that provides glasses-free, fully immersive, touch sensitive virtual reality. I have no idea how it'll work, and I don't think we even have the means to do it right now, but when we do, my lawyer will be suing the hell out of someone.

It was my idea first.

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