Suit claims patent infringement.

Canadian digital media distribution company Musicrypt Inc. has filed a $15 million lawsuit alleging patent infringement against Destiny Media Technologies Inc., Destiny Software Productions Inc. of Vancouver, Promo Only Inc. of Orlando, Fla., and Promo Only CD's of Calgary.

In its filing, Musicrypt alleges that its patent counsel faxed and delivered a registered letter in July 2005 to Destiny Media and Promo Only in the U.S. and Canada advising them of Musicrypt’s patent rights and seeking that the companies cease the alleged infringement. Specifically, Musicrypt charges that Destiny Media and Promo Only’s systems infringe its patent and that the validation process for access as claimed in Musicrypt’s patent is not limited to biometrics.

“Protection of intellectual property rights is essential to the functioning of a modern society,” said John Heaven, President and CEO of Musicrypt in a release. “Our customers in the music and broadcast industries have a thorough understanding of the necessity to respect these rights. This action seeks to protect Musicrypt’s valuable technology and compensate our stakeholders for what Musicrypt believes is the deliberate and ongoing contravention of these. It is not our intent to litigate this by press release but rather by proper judicial process, which we are pursuing vigorously.”

Destiny Media CEO Steve Vestergaard told Billboard Radio Monitor, “Musicrypt has a Canadian patent that is for controlling access based on the user, so it’s a patent on biometric access control. Our system doesn’t use biometrics access control and so we don’t believe that we infringe on that. We became aware that Musicrypt was making that claim out in the market and so we filed suit on March 8 just to have a judge clarify that we indeed don’t infringe. On June 2, Musicrypt filed a statement of defense and counterclaim of damages for $15 million. The way they have written their press release about suing us is a bit misleading.”

Officials at Promo Only were not immediately available for comment.

Musicrypt has an exclusive partnership with Billboard Radio Monitor to market and promote its DMDS in America.

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