San Francisco technology licensing company Friskit has
filed suit against RealNetworks and Listen.com, charging that they
had infringed on its patents relating to search engines for
creating nonstop playlists for streaming media
players.
Friskit claimed RealNetworks' RealOne Player Plus software and
Listen.com's Rhapsody streaming music service infringe on its
patented technology. The suit potentially encompasses revenues from
sales of the players and subscription products.
RealNetworks is in the process of acquiring Listen.com, and also
runs a subscription-based streaming media service of its own,
RealOne Superpass.
"They are no longer buying an asset, Rhapsody, they are buying a
large contingent liability. The more subscribers they get, the more
they will owe us in damages," said Friskit chairman and chief
executive officer George Aposporos.
RealNetworks declined to comment on the matter.
One of the biggest dangers to a company like RealNetworks, if
infringement is proved, is that it might be barred from using the
technology.
"The greatest financial risk to the defendants, RealNetworks and
Listen.com, is the possibility of a permanent injunction," said
David Schlitz, head of the litigation group of law firm Burns,
Doane, Swecker & Mathis in Alexandria, Virginia. Schlitz is not
involved in the case.
As a general rule, courts award permanent injunctions once there
is a determination of infringement and, as a result, the litigants
in many patent cases - probably up to 85% - settle because of the
enormous risk, Schlitz said.
Friskit was in talks with RealNetworks to license its
technology, but filed the lawsuit after licensing negotiations
failed, Aposporos said.
Friskit's claims relate to three US patents. In November 2000,
Friskit launched a service via its website allowing consumers to
search for streaming music from their favourite artists and to
build dynamic playlists of such content. It removed the service in
early 2001, Aposporos said.
"We created a lot of interesting technology. We had the
beginnings of a consumer hit on our hands, but in 2000, if you were
in music, that wasn't enough. You could have 10 million or 20
million users, and still not win," he added.
So far, Friskit has only filed suit against RealNetworks and
Listen.com, but could spread the net wider. "We are looking at
other services, but we have not reached any conclusions yet,"
Aposporos said.
Friskit may already have enough on its plate with one lawsuit
pending, according to Schlitz.
"Patent litigation is long and expensive. The average cost of a
medium-sized litigation in the US is about $2m. It can take a year,
two years in some jurisdictions. And this is just the first scene
in the opening act: It can go to appeal. Friskit has a long road
ahead of it," he said.
Peter Sayer writes for IDG News Service