Amazon Goes to War Over Music Patents

E-commerce giant Amazon.com (Nasdaq: AMZN) and four other Internet sites that employ music sampling features were slapped with a patent infringement lawsuit Friday by Intouch Group, Inc., a San Francisco, California-based provider of in-store kiosks and Internet music sampling technology.

Joining Amazon in the U.S. District Court for the Northern District of California docket book are Liquid Audio (Nasdaq: LQID), Listen.com, Discovermusic.com, and Time Warner, Inc. unit Entertaindom.

Intouch is alleging that all five companies violated its two registered patents, which it claims cover proprietary technology for delivering music samples, the 30-second snippets of a song that let consumers listen before buying.

Two-Year Process

Intouch CEO Joshua Kaplan told the E-Commerce Times that the company filed the suit only after being ignored in attempts to get the companies to acknowledge a patent conflict and to settle the issue out of court. He said that Intouch has been in discussions with Amazon.com for “probably two years” regarding the infringement.

Kaplan said that there are likely thousands of companies that violate the patents, but that the five defendants were chosen as representatives of different classes of music sites. “You can’t sue the world,” he said.

Intouch, Kaplan said, has sunk $30 million (US$) into developing its music sampling kiosks and Internet database of 300,000 30-second song samples. The lawsuit, he said, is an attempt “to raise the level of consciousness of these companies regarding these patent violations.”

‘Not Here to Put People Out of Business’

The patent umbrella might appear to be broad, Kaplan explained, but he said Intouch’s 1999 patent is an improvement over its 1993 patent, which stemmed from its development of music kiosks in record stores.

“We’ve been around for 10 years, which is well before [Amazon CEO] Jeff Bezos made his journey to the top,” Kaplan said. “There wasn’t even a public Internet when we started, but the industry has moved much closer to us over the years. We’re not here to put people out of business, we’re just trying to protect our proprietary rights.”

Intouch is seeking monetary damages of up to three times the amount it sustained from each of the defendants. Kaplan said the company is also considering whether to file for injunctive relief.

If the company wins that legal skirmish, Amazon.com and the others would have to take their music sampling features off their Web sites.