Byline: David McGuire
A pair of software companies linked with the Kazaa peer-to-peer network are claiming that they hold patent rights to technology behind much of the world's Internet song-swapping and are demanding that several smaller file-sharing networks obtain licenses in order to continue operating.
Attorneys for Altnet Inc. and its parent company, Sherman Oaks, Calif.-based Brilliant Digital Entertainment Inc., sent letters to U.S.-based file-swapping firms -- including LimeWire, BearShare and Mashboxx -- claiming that the companies were using patented technology in their products. The letter doesn't explicitly threaten a lawsuit, but does invite the firms to "discuss licensing opportunities."
If a court upholds the patent claims, it could provide a new revenue stream for Altnet and give the firm a stranglehold over a popular means of identifying and trading digital copes of music, movies and software just as a fledgling industry has sprung up to try making money off the concept of legitimate file sharing.
"They're using our technology. We just want them to pay us a reasonable fee for it," said Lawrence Hadley, counsel for Altnet and Brilliant. Hadley wouldn't name the networks targeted by the letters, but said copies had gone out to most of the major peer-to-peer developers in the United States.
Even if the letters don't lead to legal action, they are likely to heighten tensions in the already strained relationship between Kazaa and the rest of the players in the P2P arena. "It couldn't really be any worse," said Jon Newton, editor of P2Pnet, an online publication covering the file-sharing industry.
Internet song swapping rose to popularity with the emergence of Napster in the late 1990s. After a judge ordered Napster to shut down in 2001, a host of second-generation song-swapping networks, including Morpheus, Grokster and Kazaa emerged to fill the void. Kazaa is one of the most popular applications and remains one of the most heavily downloaded pieces of software on the Internet. Altnet's software allows users to purchase liscensed copies of music over the Kazaa network.
Altnet has already inked a licensing deal for the technology with one of the largest peer-to-peer companies, Vanuatu-based Sharman Networks, the firm that distributes Kazaa. The connections between Altnet and Kazaa -- which share a "joint enterprise agreement," according to Sharman -- are among the issues currently being addressed in a copyright infringement case filed by the Australian music industry against Sharman.
Patent for 'Hashing'
The letters' recipients and a number of intellectual-property experts say Altnet will have little chance of winning a court claim, since the patents cover a broad scientific premise that predates Altnet, file-swapping and even the Internet.
The technology at issue is "hashing" -- a method for assigning a unique tag or "hash" to a digital file. By comparing the hashes, rather than entire files, file-swapping software can quickly process users' requests for specific songs, movies or other files.
Sam Darwin, the chief information officer of Miami-based BearShare, acknowledged that the company uses hashing to identify files, saying the practice has been routine in the peer-to-peer community. "It's really common sense, which makes it hard for me to imagine that [the patent] would be defensible in court," Darwin said.
Patent law requires that an invention be novel, useful, and non-obvious to experts in the field in order to qualify for a valid patent. Ian Clarke, founder of the P2P network Freenet, examined the patents cited by Altnet for an article he wrote in 2003.
"This is a classic example of what is wrong with the U.S. patent system," Clarke said. "These patents essentially cover a very obvious technique that's been used for decades. For someone to get a patent on something that is so obvious really just beggars belief. Or rather it would beggar belief if one weren't familiar with some of the other patents granted by the United States Patent and Trademark Office." Freenet is not a commercial song-swapping network and did not receive a letter from Altnet.
But Hadley said a federal jury has already upheld the validity of at least one of the patents. In 2000, one of the original patent holders -- a San Francisco firm called Digital Island Inc. -- sued Web content manager Akamai Technologies, claiming that the company was violating the hashing patent. Akamai prevailed in the ensuing trial, when a jury decided that the company was not using the patented technology, but the same panel concluded that the patent itself was valid, Hadley said.
Altnet licenses the patents from Ronald Lachman, a Northbrook, Ill.-based technology entrepreneur. Lachman, who has started several high-tech firms, was appointed chief science officer at Brilliant Digital in 2003. He declined to provide details of the licensing agreement.
Louis Tatta and Greg Bildson, the chief operating officers of BearShare and Lime Wire, said they're in talks with their peers in the field about pooling their resources to mount a legal challenge against the patent claims. Both said they would not honor Altnet's claims.
'We Call It an Offer'
Others don't appear to be taking the letter that seriously.
"When I stopped laughing, I re-read the letter and first of all I found it amusing that they said I was using their technology when we haven't even launched yet and nobody's seen my software," said Wayne Rosso, CEO of Mashboxx, a soon-to-be-launched commercial peer-to-peer service. Mashboxx plans to distribute legal, licensed files over its network using technology developed by San Francisco-based SnoCap.
Hadley said Altnet doesn't have any immediate plans to sue companies that don't respond to the letters, but added that the company has vowed to protect its claims by all available means, including litigation. "You could call it a warning. We call it an offer to license our technology," Hadley said.
In December, Altnet and Brilliant sued the Recording Industry Association of America and three companies that the record industry pays to track and disrupt the transmission of copyrighted songs over P2P networks. Altnet and Brilliant claimed that the technology the companies were using to disrupt the system violated their hashing patents.
Hadley said the lawsuit against the RIAA is meant to shut down the recording industry's guerilla-style attack on file sharing. He said the letters to peer-to-peer companies are not aimed at shutting those companies down.
Benjamin Hershkowitz, an intellectual-property attorney at Kenyon & Kenyon in New York said the letters are consistent with an effort to profit from the technology, rather than prevent people from using it. "If you wanted to keep your technology exclusive to you, you try to shut people down by getting an injunction. But if you want to exploit your technology, you do it through licensing. They're trying to collect their tax, if you want to call it that, on what's being done."
Although all peer-to-peer companies are in the midst of fighting off legal and regulatory challenges, Kazaa has declined to join forces with other P2P companies.
At a recent Federal Trade Commission workshop on file sharing, the head of the peer-to-peer industry's main lobbying group -- P2P United -- said Sharman would "never" be a member of that organization. Kazaa retains its own separate lobbyist.
Rosso said Sharman -- which most people in the peer-to-peer community mention in the same breath with Altnet -- has never been interested in collaborating with its smaller peers.
"They're completely non-communicative and if you're able to somehow get in touch with someone, they're extremely arrogant," Rosso said. "They've always tried to force their will on everybody else and this is a problem. They have the big dog syndrome."
"Kazaa is totally self-serving," said P2Pnet's Newton. "Its interests are totally around getting themselves in the best position to exploit users and the market."
Sharman Networks and the Recording Industry Association of America declined to comment for this story.
washingtonpost.com Staff Writer Robert MacMillan contributed to this story.
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