CDnow and N2K have agreed to pay $3.3 million to settle a patent infringement suit brought by SightSound Technologies.
CDnow and N2K conceded the validity of SightSound’s patents covering the commercial downloading of music on the Internet. The decision sets a legal precedent for SightSound to attempt to enforce those patents against other services selling songs online, such as iTunes, Buymusic.com and Napster.
CDnow and N2K, subsidiaries of German conglomerate Bertlesmann, did not concede any wrongdoing from their prior activities in the music download business, but agreed not to further contest the Lebanon, Pa.-based SightSound’s patents.
The settlement was entered Friday (Feb. 20) by Judge Donetta W. Ambrose of the U.S. District Court for the Western District of Pennsylvania.
A jury trial in the case had been set to commence in a Pittsburgh federal court next week. SightSound originally sued N2K in 1998, when N2K began selling paid downloads through an agreement with Liquid Audio.
“Resolution of this dispute, after six years of vigorous litigation, is momentous,” says William Wells of Kenyon & Kenyon, lead counsel for SightSound.
CDNow spokeswoman Paula Batson tells Billboard.biz the company is “extremely pleased to confirm that we have successfully settled this litigation related to N2K and CDNow sales of downloaded music occurring between 1997 and 2001.
“This matter does not affect our core business, which is the sale of CDs through traditional and online sales channels. This settlement does, however, position us well for the future if we wish to engage in the sale of downloaded music,” Batson adds.
