Out-Law / Your Daily Need-To-Know

Patent on internet downloads aggressively enforced

Out-Law News | 13 Jun 2002 | 12:00 am | 1 min. read

E-data Corporation has sent warnings to many of the internet’s biggest businesses because it believes they are infringing its so-called “Freeny Patent” - which covers music, books, movies and other products distributed digitally over the internet.

In November 2000, a US appeals court ruled on the controversial patent, limiting its scope to an extent. The ruling meant that sales of digital products downloaded only to PC hard drives are not covered by the patent. However, where digital products are downloaded, streamed or copied onto compact discs, paper or other storage media in homes and offices, it is possible that the patent will apply.

The New York-based company yesterday announced that it is filing the first of many anticipated patent infringement lawsuits against an as-yet-unnamed company in a Wisconsin court. In a statement, E-data’s president, Tibor T Tallos, said:

"While the initial filing is against one company, E-data plans to add more companies over the course of the next few weeks. During the past few months E-data has sent notice of infringement letters to over one hundred companies, including some of the biggest companies on the internet. While E-data management is talking about settlements and licensing with some of these companies, others are at risk of being added to this lawsuit, or to additional lawsuits we are planning."

This is the first lawsuit filed by E-data in over six years. Tallos said that this reflects “a new determination by the company to aggressively enforce our patent.”

The company says it is carefully selecting company targets to sue based on their location and the market segments they represent. It hopes to obtain judgments “that would impact negotiations with other companies in [the same] market segment.”

The Freeny Patent is entitled: "System for Reproducing Information in Material Objects at a Point of Sale Location." It describes a system and method of distributing content over electronic and wireless networks. The company says that it holds the Freeny Patent in both North America and Europe.