In true David and Goliath style, tiny US-based company E-Data is suing software giant Microsoft, claiming its MSN music download service breaches its patent. Apple's iTunes service has so far escaped action after choosing to delay its European launch.
The latest legal action is just one of several E-Data has brought against music download providers over the past few months. The company is currently suing HMV, OD2 and Tiscali. If the courts find in favour of E-Data it could become one of the wealthiest companies in the world.
E-Data claims a rash of download service providers are violating its Freeny patent — named after its inventor C Freeny Jr. According to E-Data the patent covers the downloading and recording of information such as music, news articles or film clips from a computer on to a tangible object. If this were the case, then companies such as Microsoft and OD2 would be obliged to purchase a licence from E-Data in order to operate their services.
"Microsoft, Tiscali and OD2 have not done their homework on patent rights before launching their services in Europe," said Bert Brodsky Chairman of E-Data Corporation.
But US courts have previously held that the patent does not include saving downloaded information to a computer hard drive. It found that for the patent to operate companies would have to provide some physical product to the end consumer, such as a pre-burned CD via a kiosk. E-Data disagrees. It believes people downloading music to their home PCs and then burning it to other devices satisfies the patent's scope.
Apple, which designed its iTunes service to allow users to download songs to their iPod, MP3 players — a more obvious breach of the patent has so far escaped any legal actions. This is because the US patent, filed in 1985 has expired. E-Data now has to wait for Apple's service to launch in Europe before it can bring proceedings.
Koos Raaser managing partner of Howrey Simon Arnold & White, the law firm representing E-Data, said he was "keeping a close eye" on Apple's actions.
Neither Microsoft nor Apple was available for comment.