Spotify slapped with patent suit just two weeks after US launch

PacketVideo wants a cut of the streaming music service's profits
Emma Woollacott

July 29, 2011
Spotify Logo

It wasn’t just movie buffs who were pleased when Spotify entered the US market - it seems patent trolls were also delighted to hear the pit-pattering of billygoat feet over their bridge.

Just two weeks after launching its cloud-based video streaming service, it’s had a patent infringement lawsuit thump onto its doormat, courtesy of a company called PacketVideo. PacketVideo’s also suing Spotify in the Netherlands.

Spotify’s service, now available in the US, the UK, Sweden, Finland, Norway, France, the Netherlands and Spain, gives on-demand access to over 15 million tracks. It has more than 10 million registered users, and over 1.6 million paying subscribers. So far, it’s claiming 70,000 in the US.

But PacketVideo isn’t at all happy about Spotify’s success - unless it gets a cut of the profits, that is. The company was set up to offer streamed video on mobile phones - but at a time when phones had tiny screens and bandwidth was limited. Unsurprisingly, it didn’t have much luck.

The company bought patent 5,636,276, which was filed in 1995, as part of its acquisition of Swiss firm SDC in 2007.

The patent’s pretty general: a ‘device for the distribution of music information in digital form’. And it covers a system for connecting a centralised memory device with a databank of digitised content to a communications network and a terminal - hardly a radical concept, even in 1995, and very general indeed.

“PacketVideo has a long history of software innovation, and is committed to creating inventive solutions that power unparalleled multimedia experiences on home and mobile devices worldwide,” says Joel Espelien, PacketVideo’s general counsel.

“PacketVideo has a strong intellectual property portfolio, and will take any necessary action needed to protect its intellectual property and prevent the misuse of its patents.”

Spotify says it plans to fight the suit.

A representative of the streaming service 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.”

If the patent is upheld, it could spell bad news for any music streaming service, including Rdio, Pandora, and Rhapsody.


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