RealNetworks Sues Startup Over Copyright

RealNetworks, a leading maker of software for playing video and audio online, is suing startup Streambox for an alleged violation of the Digital Millennium Copyright Act.

This clash is the latest in an ongoing e-commerce battle over which format will ultimately dominate the lucrative music and video Internet downloading market. Additionally, it underscores how technology can quickly compromise the copyrights of music and video artists.

In the lawsuit, filed last week in U.S. District Court in Seattle, Washington, RealNetworks alleged that the Redmond, Washington-based Streambox has infringed upon its copyrights by designing software that enables users to copy audio and video into RealNetworks’ proprietary media format.

The lawsuit further alleges that Streambox’s software lets users convert the files to other formats, such as MP3 and those played by Microsoft Corp.’s Windows Media.

Critical Issue For Artists

According to the filing, RealNetworks believes that the ability of Streambox software to encode in RealNetworks’ video and audio streams could hurt its ability to develop this market by making artists reluctant to offer their work via the Internet.

“Only by affording this protection against the piracy of copyrighted works has RealNetworks been able to encourage copyright holders to make their content accessible over the Internet,” the lawsuit asserts.

Additionally, because Streambox lets users download and install its software as an add-on component to the RealPlayer, RealNetworks contends that Streambox is undermining its licensing agreement with Snap LLC of San Francisco, California. Snap has the exclusive right to perform searches conducted through RealPlayer and pays RealNetworks a fee for each search.

Restraining Order Granted

Meanwhile, the U.S. District Court granted a temporary injunction against Streambox on Friday to halt the development, production and sale of its Ripper, VCR and Ferret software.

However, the court also ordered Real Networks to post a $1 million (US$) bond payment to cover any loss to Streambox if the court concludes that the temporary injunction was wrongfully granted.

“We are pleased that the judge has granted our request and issued a temporary restraining order against Streambox,” said Alex Alben, vice president of government affairs, RealNetworks, Inc. “Both our lawsuit and the judge’s actions demonstrate the importance of intellectual property rights in the digital age. We will take significant action to ensure that programming and content delivered by RealNetworks products are protected against piracy.”

Streambox Responds

“I don’t understand why they [RealNetworks] are alleging this when our products and technologies truly benefit the content providers and consumers,” said Robert Hildeman, Streambox’s chief executive officer in a written statement. He also stressed that his company will fully comply with the court’s restraining order.

“The issues are about file format, content and consumer rights and business models,” Hildeman said. “The media and content industry should not fear Streambox — the industry needs to understand the issues that are being determined by this lawsuit.”

Hildeman added that Streambox still plans to release versions of its software products that do not violate the restraining order.

The trial is scheduled to begin January 7th.