Napster Faces Closure Challenge

Following (admittedly somewhat belatedly) on the heels of E-Data’s Freeney Patent claims, SightSound claims to hold a patent for distribution of digital audio and video and have filed a suit to close down Napster for breach of the patent. As with the Freeney Patent SightSound’s Patent has previously been held up by courts despite its incredibly broad remit. There is a risk that courts upholding digital patents with very broad remits will bring increased interest in the business model of buying up digital patents from defunct dot com companies with the sole purpose of trying to extract license fees from established companies.

One interesting aside to this story is that SightSound claimed that negotiations broke down with Napster when the music company requested a free license for distributing video. If true, this was probably just Napster covering their backs for what is an inevitable expansion of business models in the future, but might just be an indicator of nearer developments.