PlayMedia settles MP3 suits

AOL intervention settles copyright infringement claims

PlayMedia yesterday settled its copyright infringement suit with Nullsoft, developer of the leading Windows-based MP3 player, WinAmp. Surprise, surprise, the announcement came a day after AOL said it was buying Nullsoft, so it's not hard to see where the motivation for the settlement comes from. The precise nature of the deal remains unclear, but it seems to centre on PlayMedia granting Nullsoft a license to use the former's AMP MP3 playback technology. That technology, alleged PlayMedia, had been pinched by Nullsoft and used to drive WinAmp. PlayMedia sued. More recently, Nullsoft swapped out its own Nitrane MP3 encoder, the one PlayMedia claimed used its code, for an industry-standard version from the Fraunhofer Institute. Can we see the hidden hand of AOL in this? Very likely. If AOL's music acquisition includes Spinner.com, which is likely to take up the bulk of the $400 million the online service is paying for both companies. It may well have factored in the $20 million that PlayMedia wanted -- more likely, it simply sicced its laywers on PlayMedia's legal eagles and a suitable 'how much to drop it?' deal was hammered out. Curiously, PlayMedia also said it had settled its parallel suit with MP3.com, which emerged last week. PlayMedia's complaint, which was based on MP3.com's offering of WinAmp for downloading despite PlayMedia's suit against Nullsoft, always appeared a little on the opportunist side, not least given MP3.com's recently announced $115 million IPO. Success against MP3.com was dependent on proving Nullsoft's guilt, and with that argument settled, there would have been little point in chasing the online music company. PlayMedia clearly realised the game was up and moved to come to a quick arrangement with MP3.com. Besides, with WinAmp and Spinner.com under AOL control, it makes sense for two key rivals to work together, and an end to the legal action would have to be the basis for their co-operation. ®

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